After breaking down below the key 80.50 level during the overnight session, the Dollar has been ableto claw its way back towards unchanged levels early in this morning’s trading. There has been little margin forerror on the US data front to support a December Fed tapering move, which is why a surprising miss in the ISMnon-Manufacturing number quickly deflated Dollar gains in the wake of positive reads from the ADP Employmentand from New Home Sales numbers. With the Beige Book providing little benefit for the Dollar as well, the barlooks to be raised even higher for a strong enough Non-Farm Payroll result tomorrow, so that the Dollar cansustain a move above and beyond this week’s early highs. Today’s early US data should help to underpin thismorning’s recovery, but the Dollar may have to rely on some dovish post-meeting commentary from the ECB inorder to drive further into positive territory later today. The Dollar may be able to rise up towards the 80.82 levelwith a positive reception for US data, combined with a dovish ECB but at this point, a strong upside move willhave to wait for – and depend upon – a pretty strong Non-Farm Payroll result tomorrow morning.
Technical Outlook: Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. The market’s close below the 9-day moving average is an indication the short-term trend remainsnegative. It is a slightly negative indicator that the close was lower than the pivot swing number. The nextdownside objective is 80.29. The next area of resistance is around 80.80 and 81.05, while 1st support hits todayat 80.42 and below there at 80.29.