While finding modest support and staying clear of yesterday’s spike low, the Dollar has plenty of workto do in order to recover from Thursday’s downside breakout, and will have to do so in the face of one of the mostanticipated US data points of the past few months. Strong headline readings from GDP and Jobless Claimsnumbers were unable to provide lasting support beyond the ECB post-meeting comments, leaving the Dollar evenmore dependent on a robust Non-Farm Payroll reading this morning to regain upside momentum, much less haveany chance of breaking out above the July-December downtrend. Fed officials have thrown out enough recentstatements on tapering to keep alive the possibility of a move later this month, but US data has not beenconsistently strong enough to support that case. At this point, the Dollar needs to see a Non-Farm Payroll readingin excess of a 225,000 gain in order to lift decisively clear of Thursday’s 5-week low. Anything less, and the Dollaris likely to find a fresh set of headwinds fairly quickly. Given the lack of near-term chart support, a weak set of USjobs data could well send the Dollar well below the 80.00 level. The Dollar may climb up towards the 80.42 areabefore the US data window, and then will clearly take direction from how much – or how little – the Non-FarmPayroll number supports the case for a December Fed tapering move.
Technical Outlook: The close below the 60-day moving average is an indication the longer-termtrend has turned down. Daily stochastics are trending lower but have declined into oversold territory. A negativesignal for trend short-term was given on a close under the 9-bar moving average. The market is in a bearishposition with the close below the 2nd swing support number. The next downside objective is now at 79.80. Thenext area of resistance is around 80.59 and 81.02, while 1st support hits today at 79.99 and below there at 79.80.