Although most global markets have calmed down after the turbulenceof the past two sessions, the Dollar is finding little if any benefit as it has extended Thursday’s severe downdraftfurther into new low ground this morning. Fed tapering is going to be off the table until well into next year and withthe US economy likely to feel the impact of the US government shutdown over the next few months, the Dollar isfinding few friends going into today’s early trading. There have been few positive highlights from the limitedselection of US data points released this week to provide any lasting strength, and the market may be waiting forTuesday’s rescheduled Non-Farm Payroll number before giving the Dollar any benefit of the doubt. Given theprospects for another budget and debt ceiling battle early next year when this present agreement runs out, theDollar has plenty of work ahead just to lift clear of this morning’s fresh 81/2-month lows. The Dollar may slidedown towards the 79.54 area later today, and could have further downside left to go before finding any sort of a”value zone”.
Technical Outlook
USD (DEC): The moving average crossover down (9 below 18) indicates a possibledeveloping short-term downtrend. A bearish signal was triggered on a crossover down in the daily stochastics.Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are takenout. The close below the 18-day moving average is an indication the intermediate-term trend has turned down.There could be some early pressure today given the market’s negative setup with the close below the 2nd swingsupport. The next downside objective is now at 78.98. The next area of resistance is around 80.21 and 80.91,while 1st support hits today at 79.25 and below there at 78.98.