Another new high for the move in the Dollar is seen this morning by the extension of last week’s bleak global economic expectations. Even though US scheduled data at the end of last week was disappointing, the currency trade seems to fixed on the idea that there is little alternative to the Greenback in the near term. Residual fear toward the situation in Greece, deflationary vibes from oil prices and renewed weakness in the Russian currency all seem to leave the Dollar with the macro-economic and interest rate differential edge. Comments from US Fed members overnight seem to enhance the Dollar’s edge as officials continue to warn of higher rates in 2015, even though they also continue to temper the prospects of rising rates because of the turmoil outside of the US. In short, a fresh downside breakout in the Euro, a lower low in oil prices and a mostly empty US scheduled report slate looks to leave the Dollar entrenched in its bull move.
Technical Outlook: The market made a new contract high on the rally. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market’s short-term trend is positive on the close above the 9-day moving average. The gap upmove on the day session chart is a bullish indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 91.94. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 91.76 and 91.94, while 1st support hits today at 91.11 and below there at 90.63.