The Dollar continues to rise off a lack of competition from abroad. In addition to ongoing fears that theEuro zone is poised to fall back into a recession, the trade also thinks the Chinese need to make changes incentral bank leadership to avoid further slowing in China. The Dollar has remained strong despite dovishcommentary from the Fed’s Evans perhaps because US home sales figures yesterday were easily the best datareleased anywhere in the world for the last several weeks. Others might suggest that Fisher commentaryregarding a sooner rather than later US rate hike, more than countervailed the dovish track from the Fed’s Evans.Another boost to the Greenback is seen from the UK CBI September retail sales results, which down ticked earlythis morning. The Dollar might see a slight dip in the wake of US initial claims figures later this morning, as claimsare expected to rise slightly and some economists are predicting a rather significant setback in August US durablegoods! In short, the Dollar is overbought technically and it could be seen as overdone fundamentally in the wakeof this morning’s scheduled data flow.
Technical Outlook: A new contract high was made on the rally. Rising stochastics at overboughtlevels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-barmoving average. Since the close was above the 2nd swing resistance number, the market’s posture is bullish andcould see more upside follow-through early in the session. The near-term upside target is at 85.58. The market isapproaching overbought levels with an RSI over 70. The next area of resistance is around 85.42 and 85.58, while1st support hits today at 84.92 and below there at 84.56.