The Dollar generally retains a macro-economic and technical edge over its competition. With expectations of more foreign central bank easing later today, slack UK home price measures and the prospect of a decline in US initial claims, the bull camp in the Dollar would seem to hold an edge. Expectations call for an 18,000 decline in initial claims but that news will follow an earlier Challenger Job-cut report and since both reports today precede the monthly non-farm payroll release on Friday the attention to US jobs and employment should take a dominating position in the action today. As suggested already, Dollar bulls have a built in edge from the charts and also from widespread expectations that the ECB will provide some measure of fresh easing. The bull track remains in place with up-trend channel support in the December Dollar moving up to 88.77 today but there is also the potential for a major spike up, blow off top in the Dollar that could temporarily boost the Dollar toward 90.00 in the coming 48 hours.
Technical Outlook: The market rallied to a new contract high. Momentum studies are trending higher but have entered overbought levels. The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 89.34. The next area of resistance is around 89.20 and 89.34, while 1st support hits today at 88.78 and below there at 88.49.