The Dollar fell back yesterday as a Fed member suggested that the Fed’s Yellen was merely echoingmarket sentiment about the timing of rising US rates and that suggests the prospect of rising rates might havebeen overstated recently. However, the Fed’s Bullard also indicated overnight that he thinks the US economy isrecovering and that unemployment would fall below 6% by the end of 2014. The Fed’s Bullard also suggested thatthe Fed would attempt to use more qualitative language than quantitative language in issuing guidance and that inturn would seem to give the Fed more latitude in its statements and actions. Yesterday’s data combined withBullard’s views that the US economy is improving, seems to have firmed up support in the June Dollar around the80.00 level. However, for the Dollar to continue to climb toward resistance up at 80.46 probably requires at least a+0.8% rise in US durable goods later this morning. On the other hand, hawkish Fed talk and positive durablesshould mean that support in the June Dollar is fairly solid down at 80.00.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.