A definitive gap higher move in the Greenback sends a loud signal that the uptrend is set to extend in the New Year. With slack economic readings flowing from the European economy overnight and somewhat disappointing Chinese data added into the mix, the Dollar is expected to win by default. In fact, we suspect that the Dollar might continue to rise despite somewhat slack US scheduled data flows later this morning. The trade is basically anticipating asset purchases from the ECB and there continues to be widespread fears that Russian antics in 2015 will generally leave the Euro zone area facing macro-economic headwinds. If the Dollar sets back off US scheduled data, use that weakness to buy into the uptrend pattern. Up-trend channel support on the March Dollar chart is seen at 90.50 and that support level rises to 90.62 on Monday.
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. Market positioning is positive with the close over the 1st swing resistance. The next upside target is 91.03. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 90.88 and 91.03, while 1st support hits today at 90.38 and below there at 90.01.