While managing to avoid any negative surprises from recent US data, it has been comments by keyFed officials that has softened the Dollar’s upside momentum heading into this morning’s trading. Boston FedPresident Rosengren’s statement that Fed policy should remain “stimulative” for some time have combined withFed Governor Powell’s comment that Fed policy will remain “highly accommodative” to soften expectations for atapering move at the December FOMC meeting, and that is clearly keeping further Dollar gains in check early intoday’s trading. Safe-haven support is unlikely to become a major source of strength for the Dollar until Fedtapering becomes more of a near-term possibility, so any fresh flare-ups of overseas risk concerns are going tohave a muted impact on prices early this week. The Dollar should continue to benefit from positive US datareadings over the next few sessions, but it may take a change of tone from Fed speakers in front of Friday’sPayroll numbers for the market to climb back towards Monday’s early highs. The Dollar should rise up towards the80.74 level if today’s ISM Non-Manufacturing reading is able to beat expectations, but it will need a revival ofDecember tapering expectations in order to regain the upside momentum seen late last week.
Technical Outlook
USD (DEC): Momentum studies are trending higher but have entered overbought levels. Apositive signal for trend short-term was given on a close over the 9-bar moving average. The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lowerthan the pivot swing number. The near-term upside objective is at 81.14. The next area of resistance is around80.85 and 81.14, while 1st support hits today at 80.45 and below there at 80.32.