After Thursday’s roller-coaster ride of a session, the Dollar is finding modest support this morning andremains far below yesterday’s spike high as the market prepares for further turbulence before this week’s tradingcomes to a close. While a surprise ECB rate cut provided plenty of fresh fuel for reviving the Dollar’s up move,third quarter GDP may have been as robust as the headline number suggested with the market clearly gettingway ahead of itself in front of today’s US jobs data. Recent US economic numbers have generally held a positivetone, but the market’s already diminished expectations for the Non-Farm Payroll reading – and its role in the Fedtapering debate – have left the Dollar vulnerable to any negative surprises this morning. At this point, it may take aupside Payroll surprise just for the Dollar to hold its ground this morning as an in-line or sluggish reading could setup a negative weekly reversal that would trigger follow-through technical selling. The Dollar is unlikely to giveback a large portion of last week’s recovery rally even with disappointing jobs data this morning, but will need toget past today’s numbers with December tapering still a possibility in order to build onto these recent gains. TheDollar will find near-term support around the 80.85 area, and needs a positive reception for today’s Payroll data toregain upside momentum.
Technical Outlook
USD (DEC): The market now above the 60-day moving average suggests the longer-termtrend has turned up. Rising stochastics at overbought levels warrant some caution for bulls. The market’s shorttermtrend is positive on the close above the 9-day moving average. A positive setup occurred with the close overthe 1st swing resistance. The next upside target is 82.01. The next area of resistance is around 81.42 and 82.01,while 1st support hits today at 80.39 and below there at 79.93.