While the Dollar remains close to Tuesdays low this morning, the currency was able to bounce from its lows as traders seem to have made their bets on the Fed’s upcoming statement. One could suggest that theDollar has factored in some dovishness from the meeting with the high to low slide in the Dollar of roughly 74ticks, while others will suggest that the Dollar from the May lows is up a rather surprising 600 points and thereforethe Dollar has gained a lot of ground off the idea that the US economy will continue to outgrow most otherdeveloped economies. However, we would suggest that most US scheduled data of late has generallyoutperformed expectations and yet the Dollar has seemingly run into significant chart resistance at the 86.00level. Pushed into the Dollar for a position play, we would like to sell a Fed induced rally as the end of QE3 and anindefinite delay in hiking rates should pull the Dollar back away from what we think is expensive levels.
Technical Outlook: Momentum studies are trending higher from mid-range, which should support amove higher if resistance levels are penetrated. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. It is a slightly negative indicator that the close was under theswing pivot. The next upside objective is 85.95. The next area of resistance is around 85.70 and 85.95, while 1stsupport hits today at 85.24 and below there at 85.04.