The Dollar is finding moderate pressure this morning as yesterday’s modest recovery took little time to run out of steam. The market has held between the 80.39 and 80.76 levels for six straight sessions now, which increases the chance for a decisive breakout if either level is breeched late this week. Although the Initial Jobless Claims reading was better than market forecasts, there are still some questions over computer glitches from earlier this month so its overall benefit to the Dollar was limited at best. Washington budget friction continues to be a source of headwinds for the Dollar, so the market will need to see some definitively strong US data points this morning in order to re-challenge this week’s highs. The Dollar should find its footing after the US data window and climb up towards the 80.68 level later in the session, but is unlikely to find a large amount of fresh support from today’s Fed commentary and will remain firmly within this consolidation zone as long as Washington budget problems continue to cast a very long shadow over the market.
Technical Outlook
USD (DEC): The daily stochastics gave a bullish indicator with a crossover up. The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. The close below the 9-day moving average is a negative short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 80.97. The next area of resistance is around 80.83 and 80.97, while 1st support hits today at 80.48 and below there at 80.27.