Optimism toward the Dollar is ramping up in the wake of a series of foreign central bank easing moves earlier this week, from the downwardly revised 2015 Chinese growth forecast and also because of on-tap EU QE expectations. Another issue that might be lifting the Dollar is general expectations of a positive monthly US Nonfarm payroll result on Friday. Surprisingly the Dollar has remained strong this week despite somewhat slack scheduled data results and some downward revisions for Friday’s number. Renewed angst toward the Ukraine in the wake of US hints at providing significant military aide, rising economic uncertainty in Brazil and talk of a lower “new-normal” growth rate in China simply funnels money toward the Dollar. We might also suggest that the Dollar looks to be pricing in a Friday number that might be difficult to satisfy!
Technical Outlook: The market made a new contract high on the rally. Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive shortterm indicator for trend. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next upside objective is 96.55. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 96.33 and 96.55, while 1st support hits today at 95.63 and below there at 95.15.