The Dollar has found its footing after yesterday’s midsession slide, but still has some way to go in order to find the grinding upside momentum seen earlier this week. Overnight developments in Japan have helped to shift safe-haven flows across the Pacific and into Dollars, but uncertainty over how this latest Washington debt “drama” will play itself out is holding further gains in check coming into this morning’s trading. Mixed results with yesterday’s set of US data have also caused fresh headwinds for the Dollar, which has not seen a decisively positive result from a US economic number since last Thursday’s Philly Fed survey. Today’s US Jobless Claims and GDP releases are capable of providing the Dollar with additional fuel for an upside move to new weekly highs, but any large-scale rally looks to be a difficult proposition until there is some resolution with this latest Washington debt and budget fiasco. The Dollar may climb up towards the 80.74 level later on this morning, and needs to see good US data results to show further evidence that a near-term bottom has been put in with last Wednesday’s spike lows.
Technical Outlook
USD (DEC): Daily stochastics are trending lower but have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. The close below the 2nd swing support number puts the market on the defensive. The next downside objective is 80.15. Some caution in pressing the downside is warranted with the RSI under 30. The next area of resistance is around 80.58 and 80.83, while 1st support hits today at 80.25 and below there at 80.15.