The dovish US Fed tilt has been partially reversed in the wake of comments from the Fed’s Bullard and it also seems as if renewed pressure in global equities and sagging international growth views have put the Dollarback in fundamental favor. Clearly the Dollar was temporarily undermined by a lack of forward progress in initialclaims yesterday but expectations of the softest growth in 5 years in China, hesitancy by the German central bankto provide fresh stimulus and ongoing weakness in physical commodities leaves the Dollar in vogue from a safehaven perspective. Critical support moves up to 85.71 and a return to the recent highs appears to be in orderahead.
Technical Outlook: Momentum studies trending lower at mid-range should accelerate a move lowerif support levels are taken out. The market’s short-term trend is negative as the close remains below the 9-daymoving average. The daily closing price reversal up on the daily chart is somewhat positive. The close over thepivot swing is a somewhat positive setup. The next downside objective is 84.76. The next area of resistance isaround 86.04 and 86.30, while 1st support hits today at 85.28 and below there at 84.76.