The Dollar enters the Wednesday trade sitting just under its recent highs and poised to encounter asignificant wave of economic information. With the early morning trade likely to focus on private jobs results andthe afternoon trade likely to react to the US Fed Beige book. However, expectations for the ADP report only callfor a gain of 210,000 and since that figure is well below last figure one has to wonder if the trade will come awayfrom US employment news this week disappointed. In fact, given that the Dollar looks to enter the critical datawindow sitting 150 points above the levels seen into last month’s key data, we have to think that the bear camphas a bit of an edge. In fact, unless the trade comes out of the next 3 days with a definitively upbeat view towardthe US economy, it could be difficult for the Dollar to see a run back above the 81.00 level anytime soon. Thosethat are long the Dollar should tighten profits stops to up-trend channel support of 80.40.
Technical Outlook: Daily stochastics turning lower from overbought levels is bearish and will tend toreinforce a downside break especially if near term support is penetrated. The close above the 9-day movingaverage is a positive short-term indicator for trend. The market’s close below the pivot swing number is a mildlynegative setup. The next downside objective is 80.35. The next area of resistance is around 80.69 and 80.82,while 1st support hits today at 80.46 and below there at 80.35.