The Dollar forged a noted failure on the charts overnight and that might be partly the result of anextraction of safe haven interest from the US debt ceiling deal or it might be the result of anticipation of slack USdata due out later this morning. While many will attempt to explain away soft retail sales data as a temporaryresult of extreme weather, seeing soft data puts the Dollar at a disadvantage, particularly against the Pound. Forsome Dollar bulls, the weakness this morning is even more discouraging when one considers, renewed anxietyflowing from Italian politics overnight, news that the Greek jobless rate hit a new record and evidence of a risingunemployment in Australia. In the short term, the main focus of the currency markets appears to be locked ontothe macro economic differential and with US numbers later today, we can’t rule out the lowest Dollar trade in overa month. Near term downside targeting is seen at 80.22 and then again down at 80.05.
Technical Outlook: Stochastics trending lower at midrange will tend to reinforce a move lowerespecially if support levels are taken out. The close below the 9-day moving average is a negative short-termindicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullish posture.The next downside objective is now at 80.41. The next area of resistance is around 80.92 and 81.09, while 1stsupport hits today at 80.59 and below there at 80.41.