The Dollar might have become temporarily overbought with its climb above 86.00 but in the wake ofthe rally this week, the bull camp in the Dollar could see an important test of their resolve through the weeklyinitial claims results. Expectations call for a slight rise which would pull that economic measure back from a recentdownside breakout on its charts. While we wouldn’t put much stock in conspiracy theories regarding manipulationof data ahead of the election, it should be noted that the Commerce Department decided to make a majorIndexing adjustment to employment data just ahead of the last election. It might also have been a coincidencethat Non-farm payroll data improved ahead of the last election but was later revised downward after the votecount. In any regard, the trend of initial claims favors the bull camp in the Dollar, but the trade today is anticipatinga moderate rise in claims and that could catch the Dollar temporarily overdone technically.
Technical Outlook: The daily stochastics have crossed over up which is a bullish indication.Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels arepenetrated. The cross over and close above the 18-day moving average is an indication the intermediate-termtrend has turned positive. The market setup is supportive for early gains with the close over the 1st swingresistance. The near-term upside objective is at 86.30. The next area of resistance is around 86.14 and 86.30,while 1st support hits today at 85.57 and below there at 85.17.