Although the market was able to bounce back from a retest of Monday’s low, the Dollar is stillstruggling to climb far into positive territory early this morning. Recent lukewarm US data points may not be doingthe Dollar any favors, but positively-received comments from Fed officials yesterday have provided somemeasure of support. Overnight news that China are going to widen their Yuan trading bands triggered a swiftpullback but was shaken off fairly quickly, as their actions were widely expected by the market. A slight lift inDecember Fed tapering expectations will help, but the Dollar needs to see a more positive tone from upcomingUS economic data in order to climb back toward last week’s highs. The Dollar may rise up towards the 80.95 butmay have to wait for key US economic numbers later in the week to make a strong move up towards last week’shighs.
Technical Outlook
USD (DEC): Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot.The next downside target is now at 80.42. The next area of resistance is around 80.95 and 81.14, while 1stsupport hits today at 80.60 and below there at 80.42.