The Dollar remains pinned to its recent highs but bullish sentiment is also sky-high and the bull campprobably needs to see an “as expected” or a slightly stronger than expected GDP result later this morning. Giventhe entrenched edge in the Dollar, the upward march in the Greenback might not be easily reversed unless thereis a broad based improvement in European sentiment. However, reports linking the sharp setback in US equitiesto the unrelenting rise in the Dollar could be the beginning of a shift in fundamental thinking as the rise in theDollar is not without consequence for the US economy. Another issue that might take some of the upside out ofthe Dollar is a fresh 6 month high in the Chinese currency overnight. Expectations for GDP call for a slight upwardrevision to +4.6%. We think long Dollar players should tighten profit stops to 85.16.
Technical Outlook: e market rallied to a new contract high. The daily stochastics gave a bearishindicator with a crossover down. Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. The market’s close above the 9-day moving average suggests theshort-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swingnumber. The next downside objective is 84.92. With a reading over 70, the 9-day RSI is approaching overboughtlevels. The next area of resistance is around 85.56 and 85.81, while 1st support hits today at 85.12 and belowthere at 84.92.