A recent pattern of lower highs on the Dollar charts, some what disappointing scheduled data flows and talk of the potential for some dovish US Fed dialogue later today leaves the bear camp with a slight edge.Scheduled data due out today include weekly mortgage Applications, housing starts, housing permits and theFOMC meeting minutes. Expectations for Housing starts and permits call for a minor gain and that news might bejust enough to firm up support under the Dollar. In the event that US data comes in soft that in turn could givefresh impetus to talk earlier this week that the US Fed was poised to voice deflation concerns in the meetingminutes. Critical support in the December Dollar is seen down at 87.47 and then again down at 87.43 and wewould suggest those support levels are set to take on an extremely critical standing. In short, the Dollar bulls haveto prove they can maintain control.
Technical Outlook: Momentum studies are trending lower from high levels which should accelerate amove lower on a break below the 1st swing support. The close below the 9-day moving average is a negativeshort-term indicator for trend. It is a slightly negative indicator that the close was under the swing pivot. The nextdownside objective is now at 87.30. The next area of resistance is around 87.83 and 88.10, while 1st support hitstoday at 87.44 and below there at 87.30.