The Dollar has been able to mildly bounce back from a new low for the move last night, but is clearly having trouble getting into positive territory – much less putting together any extensive recovery from this current slide. Washington budget “discussions” have shown few signs of any near-term resolution, which has taken Fed tapering off the table until December at the earliest. In addition, a positive reception for Chinese and Euro zone non-Manufacturing sentiment data has eroded the Dollar’s residual safe-haven support as well. The government shutdown has meant that the Dollar will need to see positive results from the limited amount of private-sector data points available, particularly with yesterday’s lukewarm ADP survey acting as a proxy for what will likely be a delayed Non-Farm Payroll number. A decent reading on the ISM non-Manufacturing survey may relieve some near-term pressure, but the Dollar’s upside remains limited at best as long as events in Washington cast a shadow over US and global markets. The Dollar may climb up towards the 80.12 level later today, but will need to see positive vibes coming out of Washington just to bounce back towards the upper portion of the post-FOMC meeting trading range.
Technical Outlook
USD (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside objective is now at 79.55. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 80.23 and 80.55, while 1st support hits today at 79.73 and below there at 79.55.