The Dollar remains squarely on the defensive this morning, and has fallen below the key 80.00 level for the first time since early February before making a modest recovery. While the Dollar may have found a lukewarm safe-haven bid as last night’s events in Washington reached their climax, that support evaporated as some positively received data points from Japan and the Euro zone helped to ease global risk anxiety. Yesterday’s set of US sentiment readings may have come in better than expected, but have made little lasting impact as the market will clearly focus on when and how the US government shutdown is eventually resolved. A decent ISM number later this morning may provide some near-term relief, but the Dollar has plenty of work ahead of it just to recover back to last week’s post-FOMC highs. The Dollar may slide back towards the 80.03 level later this morning, but may retain just enough safe-haven appeal from the lack of resolution in Washington to avoid sliding further down into new low ground.
Technical Outlook
USD (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market’s short-term trend is negative as the close remains below the 9-day moving average. The market’s close below the pivot swing number is a mildly negative setup. The next downside target is 79.95. The next area of resistance is around 80.51 and 80.69, while 1st support hits today at 80.15 and below there at 79.95.