The Dollar has continued to rise overnight despite strong UK output figures and a rather thin release ofUS data yesterday. However, the Dollar is seemingly garnering most of its lift from overt weakness in the Euro,which is turn is at least partially the result of nagging deflationary pressures. While the US economic outlook hasfailed to give off a definitive picture of forward growth, the US numbers and price action appears to leave the UShead and shoulders above the Euro zone and China. In today’s scheduled data flow, the US will present weeklychain store sales results, a small Business optimism Index and monthly Wholesale trade report. Wholesale tradeis expected to rise and the Small Business Index is expected to soften. Therefore the Dollar looks to continue togrind higher without the help of distinctly positive domestic data flows. Support in the Dollar moves up to 80.87and resistance isn’t seen until the market re-tests the 81.00 level.
Technical Outlook: Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. A positive signal for trend short-term was given on a close over the9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance.The next downside objective is now at 80.22. The next area of resistance is around 80.84 and 80.96, while 1stsupport hits today at 80.48 and below there at 80.22.