After a subdued start to the trading week, the Dollar has found moderate support during the overnightsession but has been unable to retest Friday’s high for the move. While US longer-term yields continue to surge inthe wake of last Friday’s strong Non-Farm Payroll result, it has been overseas risk concerns that have played akey role in the Dollar regaining upside momentum. In order for the Dollar to climb up and drive further into newhigh ground, however, a more compelling case will need to be made that a December Fed tapering is more than aremote possibility. Dallas Fed President Fisher’s comments that their QE “cannot go on forever” is a step in theright direction, but there needs to be a clear “change of tune” from upcoming Fed speakers in the wake of lastweek’s robust GDP and Payroll numbers in order for the Dollar to generate significant upside follow-through. TheDollar may climb up towards the 81.56 level after today’s second-tier US data results, but really needs to seesome hawkish Fed comments in order to reinforce the case for a December tapering move.
Technical Outlook
USD (DEC): Studies are showing positive momentum but are now in overbought territory, sosome caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend.The market tilt is slightly negative with the close under the pivot. The next upside objective is 81.49. The next areaof resistance is around 81.28 and 81.49, while 1st support hits today at 81.00 and below there at 80.92.