The Dollar remains under moderate pressure this morning while showing few signs of starting any sustained recovery move, and for now remains in close proximity to the bottom end of yesterday’s post-FOMC downdraft. The Fed’s “no tapering” decision clearly surprised the marketplace, with Chairman Bernanke’s postmeeting comments adding to the Dollar’s problems by appearing to push any tapering action well beyond the market’s near-term horizon. While tapering will certainly occur sometime in the future, it is evident that US economic data will need to show consistently stronger results for that to occur. With the likelihood of a large jump in weekly Jobless Claims due to last week’s computer glitch, the Dollar will have its work cut out for it just to lift clear of these recent lows. Only time will tell if the Dollar is close to a longer-term low, but for now is unlikely to shake off a negative overall tone during the next few sessions. The Dollar may slide further into new low ground towards the 80.05 support level after the US data window, and will likely remain on the defensive during today’s trading.
Technical Outlook
USD (SEP): Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The next downside objective is now at 79.43. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 80.82 and 81.65, while 1st support hits today at 79.72 and below there at 79.43.