The Dollar has regained modest upside momentum this morning, and also appears to have found near-term support around the 80.00 level as the market continues to focus on the ongoing budget drama in Washington. Signs of progress may be few and far between,but there is some growing optimism in the market that the upcoming US debt ceiling deadline may compel both sides to reach some sort of an agreement. In fact, strongly worded concern from the US’s major creditors, China and Japan could increase the pressure on lawmakers to find a solution. Therefore it goes without saying as long as the US government shutdown lingers, Fed tapering will be off the table so the Dollar’s upside will remain limited atbest. The Dollar may be able to rise up towards the 80.23 area later this morning but will continue to look towards Washington and today’s Fed speakers for fresh support in order to lift decisively clear of these current price levels.
Technical Outlook
USD (DEC): Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance istaken out. The market’s short-term trend is negative as the close remains below the 9-day moving average. The market tilt is slightly negative with the close under the pivot. The next upside objective is 80.30. The next area of resistance is around 80.13 and 80.30, while 1st support hits today at 79.90 and below there at 79.82.