While there has been a clear boost in optimism that US politicians will be able to avoid crashingthrough the debt ceiling later this week, the Dollar has been unable to climb out of its recent consolidation pricezone during the overnight session. There may still be plenty of concern that if this issue is “kicked down the road”- even until February of next year – this could keep Fed tapering off the table through the end of 2013. The NYFed’s Empire State survey will provide some fresh US economic data to digest, but it will be difficult for the Dollarto get beyond events in Washington as any setbacks on Capitol Hill are not going to be well received by themarket. As long as this “deal” continues to make forward progress, the Dollar will find some measure of supportthis morning but will need to see positive US data results as an additional source of strength going forward. TheDollar could rise up towards the 80.82 area later this morning as long as both sides of Congress (and bothparties) are receptive to the current deal, but Dollar still has some way to go to find enough upside momentum tolift decisively clear of this current consolidation price zone.
Technical Outlook
USD (DEC): Momentum studies are rising from mid-range, which could accelerate a movehigher if resistance levels are penetrated. A positive signal for trend short-term was given on a close over the 9-bar moving average. It is a slightly negative indicator that the close was under the swing pivot. The next upsidetarget is 80.62. The next area of resistance is around 80.50 and 80.62, while 1st support hits today at 80.24 andbelow there at 80.08.