The Dollar was unable to hold onto mild support this morning, and continues to have plenty of work ahead of it in order to regain the upside momentum seen before last Friday’s Payrolls numbers came out. Comments yesterday by Fed Regional Presidents Lockhart and Evans provided some fresh hope for a September start to Fed tapering, but both officials made the point that tapering would remain data dependent. While Tuesday’s Trade number had a fairly positive “headline” number, there were enough concerns with the decline in imports to limit any lasting benefit for the Dollar. With little in the way of top-tier US data this morning, the Dollar may need to see fresh overseas risk concerns to make any large-scale recovery from these current levels. The Dollar may climb back towards the 81.93 level later this morning, and needs to see further evidence of an improving US economy to sustain any upside moves.
Technical Outlook
USD (SEP): The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market setup is somewhat negative with the close under the 1st swing support. The near-term upside target is at 82.17. The next area of resistance is around 81.88 and 82.17, while 1st support hits today at 81.43 and below there at 81.27.