Yesterday’s positive bias for the Dollar has quickly turned negative today. Most news out of Europe has been positive for the Dollar yet; it is fading lower with slightly more downward pressure than a profit taking correction. This negative market attitude is setting up good potential for a large move if the US employment report is negative. The sell off from a negative employment report will be greater than the advance from a positive report. Caution for long positions should be used if Non-Farm Payrolls (NFP) come in less than 190k. Selling pressure will be greater if NFP’s come in below 170k. Over 200k the Dollar bulls will have a firm hand to push higher only if the official Unemployment number also drops. Mixed numbers of the two will give an excuse to take profits from yesterday’s rally. Be careful of revisions to July’s NFP, any large changes there could spark unexpected movement.
Technical Outlook
USD (SEP): Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar moving average. The outside day up and close above the previous day’s high is a positive signal. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The near-term upside objective is at 83.14. The next area of resistance is around 82.96 and 83.14, while 1st support hits today at 82.36 and below there at 81.93.