U.S. dollar futures are slightly higher Tuesday morning, testing resistance at the previous cycle high of 98.30. A close above this key level will entice buyers and squeeze the market toward 99. Economic data this week has been slightly positive, propping up the dollar. New home sales came in above consensus Tuesday morning, up 733,000 in October vs expectations of 707,000. Consumer confidence clocked in at 125.5, slightly below expectations but till within the consensus range.

Meanwhile, the October trade balance ran a deficit of $66.5 billion, less than the expected deficit of $70.8 billion. The question is whether or not “warmer data” is indicative of economic recovery stemming from Fed policy, or if this is an “economic correction” with less-than-stellar data set to return next year. Either way, I believe the dollar will outperform other major currencies over the next few months. Should the world economy continue to slow, the greenback will likely acquire some “safe-haven” interest. If global economics start to perk up, this growth will likely be led by the U.S., keeping the dollar strong compared to foreign currencies. The technical pattern on the chart looks bullish, and it appears the only thing that can stop the dollar form moving higher is an extremely dovish Fed. The most recent testimonies coming from the US central bank have been neutral to hawkish.