While still holding onto a sizable portion of recent gains, the Dollar is starting to look a little sluggish atthe end of a turbulent trading week. Yesterday’s big jump with Initial Jobless Claims may have been a shock tothe system, but the Dollar’s ability to shake off that poor reading has underscored the improvement in optimismthat both sides in Washington will get something accomplished in front of next week’s debt ceiling deadline. Aprivate survey of Consumer Sentiment will likely reflect the negative impact of Washington’s budget battle on thebroader US economy, so the Dollar could find fresh headwinds later in the session. As long as the current set ofbudget negotiations can still generate a positive tone and eventually show definitive signs of progress, however,the Dollar’s downside may be limited at best. The Dollar may slide down towards the 80.26 level later thismorning, but still looks to be in much better overall shape than where it was one week ago at this time.
Technical Outlook
USD (DEC): Momentum studies are trending higher from mid-range, which should support amove higher if resistance levels are penetrated. A positive signal for trend short-term was given on a close overthe 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The next upside objectiveis 80.84. The next area of resistance is around 80.71 and 80.84, while 1st support hits today at 80.43 and belowthere at 80.27.