The Dollar remains entrenched in an upward trend on its charts but the bull camp probably needs some assistance from scheduled data to countervail the political headwinds facing the US economy from the State of the Union address. While the President trumpeted the US recovery, most of that potential windfall was countervailed by the threat of rising taxes. The trade expects to see minimally positive data from US housing starts and permits later this morning and at this stage almost anything positive will provide the Dollar with some lift. In fact, the dollar has such limited competition that it could probably survive disappointing data. Expectations for US starts and permits call for gains of only 1% today and therefore the magnitude of the gains aren’t expected to be overly impressive. Up-trend channel support in the March Dollar today is seen at 92.28 and that support rises to 92.41 on Thursday.
Technical Outlook: A bullish signal was given with an upside crossover of the daily stochastics. Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market’s close above the 2nd swing resistance number is a bullish indication. The next upside objective is 93.77. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 93.62 and 93.77, while 1st support hits today at 93.09 and below there at 92.69.