The Dollar has been able to consolidate yesterday’s rebound, but for the moment is showing little inclination to make any large move away from the post FOMC meeting lows this morning. Yesterday’s positive spin from US economic data, particularly from a 21/2-year high in the Philly Fed survey, was clearly a shot in the arm for a Dollar that is still coming to terms with the Fed’s inaction on tapering. The Yen’s sharp pullback will make the Dollar more viable as a safe-haven destination, but this week’s events make it clear that sustained improvement from the US data front will be required in order to repair this week’s chart damage. While Fed commentary late in the session may provide a boost, the Dollar still has a lot of work ahead just to prove that a near-term bottom has been put in with Wednesday’s downdraft. The Dollar may rise up towards the 80.65 level later today, but is unlikely to find strong upside momentum heading into the weekend.
Technical Outlook
USD (SEP): Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The upside daily closing price reversal gives the market a bullish tilt. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 80.02. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 80.69 and 80.82, while 1st support hits today at 80.29 and below there at 80.02.