The bullish drumbeat for the Dollar continues with favorable US data yesterday providing the foundation for the latest range up extension into new high ground from the move. With an extremely active US scheduled report slate today and some of the data focusing on the US jobs sector, one should expect a major trend decision to unfold again. Limiting the upside in the Dollar is a short term overbought technical condition but that limitation should be more than countervailed by the promise of more easing from the ECB Thursday and by the expectation that US data today will add to the Dollar’s macro-economic differential edge. Some players think that the Dollar will pause today in the wake of the numbers as ADP estimates call for a slight downtick from last month’s readings and with the key monthly jobs readings due out this Friday extra attention might be given to job sector news directly ahead. The trend is up but US data has to show something positive to extend the Dollar straight away.
Technical Outlook: A new contract high was made on the rally. The daily stochastics have crossed over up which is a bullish indication. Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicator for trend. A positive setup occurred with the close over the 1st swing resistance. The near-term upside target is at 89.26. The next area of resistance is around 89.06 and 89.26, while 1st support hits today at 88.33 and below there at 87.80.