With this week’s FOMC meeting in its rear-view mirror, the Dollar continues to find help from overseasas the market has nearly recovered all of its late October losses. While in-line Chinese PMI readings have helpedto soothe global risk concerns, it has been Thursday’s poor Euro zone inflation and jobs readings that are castinga long shadow over this morning’s trading and have caused a modest revival of the Dollar’s safe-haven appeal. Asurprisingly strong Chicago PMI reading has also helped to strengthen the Dollar as well, but may require some”confirmation” from this morning’s ISM reading for the Dollar to build upon this week’s sizable gains. It may beambitious to feel that Fed tapering is back on the table for the December FOMC meeting without US data pointsgenerating consistently strong results just yet, but support from overseas should help the Dollar hold the upperhand on most major currencies heading into the weekend. The Dollar can extend today’s early rally up to the80.68 level with good US data this morning, but may have trouble reaching up to a new 6-week high until thereare additional strong results from the US data front.
Technical Outlook
USD (DEC): Momentum studies are trending higher from mid-range, which should support amove higher if resistance levels are penetrated. The intermediate trend could be turning up with the close backabove the 18-day moving average. The market’s close above the 2nd swing resistance number is a bullishindication. The near-term upside objective is at 80.79. The next area of resistance is around 80.62 and 80.79,while 1st support hits today at 80.01 and below there at 79.57.