The Dollar continues to have trouble sustaining upside momentum, but has been able to hold its ground within positive territory early in today’s trading session. Lukewarm US economic data and divergent Fed commentary have provided little in the way of underlying support for the Dollar, although the market is staying well clear of last week’s spike lows. It may be difficult for the Dollar to become a “first-choice” safe-haven destination with Washington debt and budget theatrics on the horizon, but the lack of downside follow-through may indicate that the market is coming to terms with a delayed start to Fed tapering. A positive reception for today’s private readings on Home Prices and Consumer Confidence should provide further strength, but it may take several sessions worth of good “top-tier” US results before the Dollar can make a strong upside move. The Dollar may climb up to the 80.83 level after the US data window, but it needs to see more positive economic readings and less Washington discord to build onto recent gains.
Technical Outlook
USD (SEP): Momentum studies are declining, but have fallen to oversold levels. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. The next downside objective is 80.30. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 80.70 and 80.79, while 1st support hits today at 80.45 and below there at 80.30.