The Dollar has lost some favor as foreign investors might be a little concerned with the “richness” of the Dollar and perhaps to a certain degree with the relative pricing of US Treasuries. It is also possible that a series of noted gains in gold is a possible sign that safe haven interest is seeking diversification. Furthermore, some Dollar longs are banking profits and moving to the sidelines because of growing fears that global deflationary pressures will serve to push back US rate hike timing. In fact, developing weakness in equities and doubt on the holiday shopping season is adding into the prospect that the Fed could nudge back the removal of the language of low rates for an extended period of time. However, the Dollar looks to remain the go to currency and the place to be in the face of a sustained setback in the global economy and that could make up-trend channel support in the December Dollar Index at 88.49 a buying opportunity.
Technical Outlook: A new contract high was made on the rally. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The daily closing price reversal down puts the market on the defensive. The market tilt is slightly negative with the close under the pivot. The next upside target is 90.06. The next area of resistance is around 89.72 and 90.06, while 1st support hits today at 89.11 and below there at 88.82.