More short covering in the Dollar overnight puts the Greenback above the mid-point of the last twoweek’s range. Clearly a large portion of the buying in the Dollar is technical short covering after the aggressive compacted washout in the Dollar over the last two weeks. In looking at the US numbers over the last 3 weeks itwas difficult to justify the slide in the Dollar, let along justify the sharp and unrelenting rise in the Euro. In fact, wecan understand the slide in the Dollar relative to the Pound, but one would think that recent softening in Germaneconomic readings would be something that provides the Dollar with some fresh bargain hunting buying interest.In conclusion, an improvement in US claims yesterday clearly halted the slide in the Dollar and that in turn mightcreate a moderately significant low above the March, April and May consolidation low zone of 79.38.
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.