The Dollar initially forged an upside breakout but was turned back from those highs in the wake of thestronger than expected Chinese Factory order results. In other words, the Dollar has finally seen some economiccompetition and we suspect that some longs have decided to bank profits ahead of US scheduled data that looksto provide some additional selling. In fact, expectations call for US claims to rise slightly but analysts also expectnew residential home sales figures to decline by almost 6% and therefore the fundamental track to start favor thedownside in the Greenback. While we doubt the Dollar will see a full retracement of the July rally (which wouldproject down to 80.52) a retest of the sub 80.75 level is certainly possible in the next few hours of trade.
Technical Outlook: Studies are showing positive momentum but are now in overbought territory, sosome caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar movingaverage. The market has a slightly positive tilt with the close over the swing pivot. The next upside objective is80.98. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance isaround 80.94 and 80.98, while 1st support hits today at 80.83 and below there at 80.76.