The Dollar has stalled just under the initial September highs in the wake of a string of mixed data points and most importantly because of the significance of this week’s FOMC meeting statement. Some of thegains in the Dollar over the last month have been the result of ideas that the Fed will alter its timing for keepingrates historically low. However, the backdrop for the Dollar is supportive as fears of more slowing in Europe,political uncertainty in the UK and calls for easing among a series of foreign central banks leaves the Greenbackwith a definitive edge. Slack Chinese factory orders results and weakness in a German ZEW economicexpectation survey this morning also adds to the consolidation low support around 84.23. If the Fed changes thetiming on low rates later this week that should launch the Dollar into new highs for the move but we think the Fedlacks US growth evidence and there is anything but inflation pushing them to alter their statement. Whileinternational influences might play a minor role in determining policy, the threat of slowing throughout the worldwould also seem to keep the Fed on hold. If the Fed offers no change in wording some weakness might be seenin the Dollar but we don’t expect to see a trend reversal.
Technical Outlook: Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. The market’s short-term trend is positive on the close above the 9-day moving average. The market has a slightly positive tilt with the close over the swing pivot. The next downsideobjective is 84.04. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area ofresistance is around 84.35 and 84.47, while 1st support hits today at 84.14 and below there at 84.04.