The Dollar is marginally higher this morning but it is also facing a significant flow of data later in thetrading session. Further more, one might suggest that the overnight economic news flow was surprisingly positive and that in turn might set a higher bar for the US data results. While the Dollar is probably short term oversold onits charts, seeing 1 or 2 soft data points could easily send the Greenback reeling back down below the 79.75level. In fact, it could be a very tall order, to undertake anything but a minor technical short covering bounce in theDollar through multiple US data windows this morning. We suspect that the key number of the session will comefrom PMI results as a flurry of foreign PMI results overnight gives the trade a direct macro-economic differentialcomparison. While expectations call for positive US data, the trend in the US economy has been 1 positive datapoint and then 1 negative data point. The bears probably retain an edge and the best the Dollar bulls can hope foris a temporary bounce.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket is in a bearish position with the close below the 2nd swing support number. The next downside target is79.57. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.98 and 80.21, while 1st support hits today at 79.66 and below there at 79.57.