Wednesday’s trading in the Dollar Index has been very tight with only a 14 point range in the overnight session. The US Trade Balance is due out at 8:30 ET and may spark some bigger movement. If the report comes in with a number less than -42 billion then, we could see some selling pressure on the Dollar. If the trade number comes in better than last month’s report and expectations, the Dollar would rally slightly. Yesterday’s price action may have set the Dollar up for a slight correction as Construction Spending and the ISM PMI both showed decent gains but the Dollar gained less than it should have from those positive reports; a sign the Dollar is running out of rally steam. The next few sessions are laden with potential Dollar moving events which may be holding back players from taking too large of a position prior to those reports.
Technical Outlook
USD (SEP): The cross over and close above the 60-day moving average indicates the longerterm trend has turned up. Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicator for trend. A positive setup occurred with the close over the 1st swing resistance. The near-term upside target is at 83.12. The next area of resistance is around 82.75 and 83.12, while 1st support hits today at 82.04 and below there at 81.70.