After showing signs of finishing out the year in consolidation mode, the Dollar has seen an abruptchange in fortune over the past 12 hours and comes into this morning’s trading under severe pressure. Thinholiday trading conditions have played a key role in the Dollar’s pullback, as there was no single catalyst for theDollar’s collapse this morning. While post-FOMC meeting US data has provided some positive highlights, therehas not been the consistent strength needed to accelerate Fed tapering expectations from their currentlyexpected pace. With no major US data points for the market to digest late this morning, and with US 10-yearyields unlikely to gain much ground above the 3.00% level going into the weekend, the Dollar may have to relyupon a late-week boost of safe-haven support in order to recover any sizable portion of overnight losses. TheDollar may find near-term support around the 79.76 level later this morning, and looks to finish out this holidayshortenedweek squarely on the defensive.
Technical Outlook: The moving average crossover up (9 above 18) indicates a possible developingshort-term uptrend. Daily stochastics have risen into overbought territory which will tend to support reversal actionif it occurs. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Itis a slightly negative indicator that the close was lower than the pivot swing number. The near-term upsideobjective is at 80.76. The next area of resistance is around 80.71 and 80.76, while 1st support hits today at 80.60and below there at 80.54.