The Dollar was able to shake off overnight pressure and put together a mild rebound this morning, but remains firmly at the bottom end of its longer-term downtrend. Yesterday’s sluggish ISM non-Manufacturing reading has left a bad aftertaste with the market, as the lack of US government data will provide the Dollar few opportunities to start up any extensive recovery from these current low price levels. The absence of US jobs data later today has taken away the Dollar’s “best” hope for a rebound, and will put even greater emphasis on the lack of progress with resolving the Washington budget debacle. While there may be some support for near-term tapering coming from today’s set of Fed speakers, the US government shutdown has likely taken any Fed action off the table until their December FOMC meeting. Short-covering in front of the weekend should help to keep the Dollar in positive territory, but the market is clearly waiting for something positive out of Washington for the Dollar to lift decisively back towards its initial post-FOMC consolidation range. The Dollar may climb up towards the 80.14 area later today, but still has a long, long way go to find sustained upside momentum while Washington fiddles with budget and debt problems.
Technical Outlook
USD (DEC): Daily stochastics are trending lower but have declined into oversold territory. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The next downside objective is now at 79.57. The 9- day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 80.02 and 80.17, while 1st support hits today at 79.72 and below there at 79.57.