The upward streak in the Dollar is abating as international economic and geopolitical anxiety hasmoderated. While the US economic report slate today is empty, the markets will see a couple US Fed speechesand there should be some weekending barbs flowing from Russia, Ukraine and the EU on the prospect of furtherRussian incursion into the Ukraine. It is possible that Fed dialogue will impact the Dollar, but the early speech issupposed to be focused on Health care and therefore the Bullard speech might be of more importance to thecurrency trade. With massive losses in the Chinese currency this week, one has to think that the Dollar saw somemeasure of lift from that situation and one now has to think that the Chinese won’t allow that volatility to continueas that could rekindle domestic inflation and unrest. As suggested earlier this week, the Dollar was oversold offideas of a pause in tapering and deserved a bounce, but to see the Dollar come back into consistent favorprobably requires a distinct improvement in forward US economic sentiment. Look for the Dollar to chop in arange defined as 80.05 to 80.55.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.