While the Dollar has started off on a weaker footing this morning, don’t be fooled as the up-trend channel on the charts remains extremely well-defined. In fact, given expectations for 4th quarter advanced GDP readings to come in below the prior quarter’s result, we suspect that the Dollar has already factored in slack data. We also think the surprise interest rate cut by Russia highlights the ongoing high level of uncertainty present in the marketplace and therefore we would not be surprised to see the Dollar come roaring back following the totality of US data flows later this morning. Keep in mind, US claims and ongoing claims were surprisingly strong and adding anything to that bias, combined with Yellen’s suggestion to lawmakers that US rates weren’t set to rise “immediately” would seem to leave the Dollar in a definitive bull track. Dollar support rises to 94.52 and there is little resistance until the old high of 95.85.
Technical Outlook: Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside target is 94.18. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 95.30 and 95.65, while 1st support hits today at 94.57 and below there at 94.18.