The Dollar has forged a somewhat significant upside technical probe overnight with the currency reaching up to the highest level since the big range down washout on October 15th. Part of the rise in the Dollar isthe result of mostly positive US scheduled data flow over the last 4 trading sessions and part of the rise is theresult of concerns that some European banks might fail stress tests. Another element behind the rise in the Dollaris a rather dovish flow of dialogue from the BOE. In the short term, we can’t rule out a near term upside extensionin the Dollar especially with little resistance seen on the charts until the 86.13 level. While expectations call for aslight rise in US initial claims on Thursday, a decline in those figures again could put the Dollar back into adefinitive macro-economic differential edge position again and that could open up to the potential for a rise in theDecember Dollar Index toward the early October highs up around 86.84.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break ifsupport levels are broken. The market’s short-term trend is negative as the close remains below the 9-day movingaverage. The daily closing price reversal up on the daily chart is somewhat positive. With the close over the 1stswing resistance number, the market is in a moderately positive position. The next downside target is now at84.63. The next area of resistance is around 85.77 and 85.95, while 1st support hits today at 85.12 and belowthere at 84.63.