The Dollar remains in vogue and retains an economic and interest rate differential edge. However,suggestions from the Fed’s Lockhart that US rates will remain unchanged into the second half of 2015 issomewhat limiting of the Dollar as some traders recently were hoping for US rate hike action to be pulled forward.Therefore, the bull camp might need to see something positive from US initial claims to directly extend the upwardmotion on the charts. However, unless US data is patently weak, the Dollar bulls should continue to control asfears of more Russian inspired slowing in the EU remains a front and center issue. While a minor decline inclaims later this morning might be initially discounted seeing claims consistently below the 300,000 level shouldratchet up rate hike talk and that in turn should underpin the Dollar. Critical support in the September Dollar isseen at the prior close of 81.50 and uptrend channel support is seen down at 81.36.
Technical Outlook: Daily stochastics turning lower from overbought levels is bearish and will tend toreinforce a downside break especially if near term support is penetrated. The market’s close above the 9-daymoving average suggests the short-term trend remains positive. The market could take on a defensive posturewith the daily closing price reversal down. The market tilt is slightly negative with the close under the pivot. Thenext downside target is 81.25. The market is becoming somewhat overbought now that the RSI is over 70. Thenext area of resistance is around 81.64 and 81.86, while 1st support hits today at 81.34 and below there at 81.25.