The Dollar is finding moderate pressure this morning after failing to post a higher high during overnight trading. While a positive daily result today would be a fifth straight “up day”, the Dollar has only recovered less than half of last Wednesday’s post-Fed meltdown. Washington budget uncertainty is starting to provide the Dollar with a modest safe-haven bid, although the Yen still appears to be the “first choice” destination for flight to safety flows. This week’s US data has been lackluster at best, so the Dollar will need a positive reception for today’s Durable Goods and Existing Home Sales numbers – both of which had shockingly bad readings last month. Disappointment with the Fed’s non-tapering decision last week may keep the Dollar to only a grinding recovery if early pressure is relieved later on in the session, but the ability to overcome mediocre US data may indicate that a near-term bottom may have been put in with last week’s spike lows. The Dollar will have an upside target of 80.83 with a positive reception for today’s US numbers, but will need to see consistent improvement from upcoming data to augment what at this point is still lukewarm safe-haven support.
Technical Outlook
USD (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The close below the 9-day moving average is a negative short-term indicator for trend. A positive setup occurred with the close over the 1st swing resistance. The next downside target is 80.45. The next area of resistance is around 80.81 and 80.89, while 1st support hits today at 80.59 and below there at 80.45.