Lack of foreign economic data combined with US economic report apprehension by many market players has capped the Dollar Index’s rise overnight. The Bank of Japan, Bank of England and the European Central Bank all meet today but none are expected to make changes to monetary policy. Potential market moving data is instead left to today’s US economic news; ADP’s Employment Change, Weekly Unemployment Data, Factory Orders and the ISM Non-Manufacturing PMI. All of these are expected to be reported less than last month’s numbers. Since the expectations are bearish the potential exists for a surprise to the upside which would rally the Dollar. However, that rally may also be subdued as caution about tomorrow’s official employment numbers could hinder too much buying. Because today’s Dollar trading has a bias to the upside and everyone is waiting for tomorrow’s official employment number, today’s ADP number, if sharply lower, could trigger a sharp Dollar sell off.
Technical Outlook
USD (SEP): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market’s close below the pivot swing number is a mildly negative setup. The near-term upside target is at 82.59. The next area of resistance is around 82.36 and 82.59, while 1st support hits today at 82.00 and below there at 81.87.