The Dollar washed out aggressively yesterday in the wake of another set of disappointing US scheduled data flows. From last week’s disappointing GDP results to the softer than expected US Factory Orders result, the trade is starting to see the lofty valued US Dollar as suspect. Another issue that might be pressing on the Dollar is slightly improved sentiment toward prospects in the Euro zone, which in turn has been improved because of a slightly positive track of developments regarding Greece. The Chinese Reserve Rate requirement cut also reduces the safe haven interest in the Dollar today as the fear of a global deflationary spiral is at least temporarily reduced. Therefore the Dollar will probably see private employment results this morning as a critical release, especially with the key monthly payroll figures due out this Friday. Expectations for the ADP report call for a 220,000 to 240,000 gain which should be strong enough to underpin the Dollar above its recent spike lows.
Technical Outlook: Declining momentum studies in the neutral zone will tend to reinforce lower price action. A negative signal for trend short-term was given on a close under the 9-bar moving average. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The next downside objective is 92.40. The next area of resistance is around 94.49 and 95.47, while 1st support hits today at 92.95 and below there at 92.40.