After surviving two retests of key support at the 80.50 level during the overnight session, the Dollar hasmanaged to put together a decent recovery rally early this morning. With little in the way of US data to digestsince before the Thanksgiving holiday, it has been overseas risk concerns that have been doing the heavy liftingfor the Dollar at the start of this week. Positive vibes from the start of the US holiday shopping season may help,but the Dollar clearly needs to find support from today’s manufacturing and construction readings to sustain thisrebound. A full-scale recovery may have to wait until Friday’s critical Payroll numbers are out of the way, but theDollar may find enough support from overseas problems to shut the door on a downside breakout for now. TheDollar may extend today’s rally up to the 81.06 level, but will continue to have little tolerance for any negativesurprises from upcoming US data.
Technical Outlook
USD (DEC): Daily stochastics are trending lower but have declined into oversold territory. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. It is aslightly negative indicator that the close was lower than the pivot swing number. The next downside objective is80.39. The next area of resistance is around 80.78 and 80.90, while 1st support hits today at 80.53 and belowthere at 80.39.