The Dollar has been able to post modest gains this morning, and for the most part has consolidated this week’s recovery rally as Fed tapering prospects remain “the” front and center issue with the market. While yesterday’s Retail Sales reading was by no means robust, the ex-autos and energy numbers were still able to show some measure of forward progress with the US economy. Inflation and Employment readings will continue to be the Fed’s main gauges for whether to begin tapering their asset purchases, so today’s PPI data will likely play a major role with whether the Dollar can extend this current rebound. Unless there is an overseas risk flareup to provide a fresh dose of safe-haven support, the Dollar will need to see consistently positive US data readings going forward in order to keep near-term Fed tapering hopes alive. The Dollar may able to climb above the 81.95 level with a positive reception for today’s PPI number, but may have to wait until tomorrow’s broader set of US economic numbers to make any large-scale extension to this current recovery bounce.
Technical Outlook
USD (SEP): Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market’s short-term trend is positive on the close above the 9-day moving average. The market’s close above the 2nd swing resistance number is a bullish indication. The near-term upside objective is at 82.22. The next area of resistance is around 82.04 and 82.22, while 1st support hits today at 81.55 and below there at 81.25.