After reaching a fresh 81/2-month low during the overnight session, the Dollar has yet to put together asustained recovery and is having trouble making any lasting move into positive territory this morning. Fears ofpotential Chinese tightening and lukewarm data from the Euro zone may be of some help, but the Dollar will stillneed to find support at home in order to lift decisively away from these recent lows. It will be difficult to get outfrom under the shadow of Tuesday’s sluggish Payroll numbers, particularly with the market still skeptical of USdata in the wake of the government shutdown, but “good news” from today’s Jobless Claims and Trade Balancereading will go some way towards putting a near-term brake on the Dollar’s price slide. Safe-haven support won’tcut it alone as a source of support with Fed tapering still well over the market’s horizon, so the Dollar will continueto have little tolerance for any disappointment from the US data front. The Dollar may climb up to the 79.42 levellater today with a positive reception for today’s numbers, but a potential key reversal will have little lasting benefitif the US cannot string together a series of “good” economic readings to finish out this week’s trading.
Technical Outlook
USD (DEC): Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. Thedaily closing price reversal up is a positive indicator that could support higher prices. The market tilt is slightlynegative with the close under the pivot. The next downside objective is now at 79.08. The market is approachingoversold levels on an RSI reading under 30. The next area of resistance is around 79.46 and 79.57, while 1stsupport hits today at 79.21 and below there at 79.08.