The Dollar comes away from the holiday shortened week with a disappointing track especially whenone considers that US data this week was mostly upbeat. However, the currency trade continues to have a “highbar” for US data and anything less than robust growth results in Dollar selling. Even in the face of slack GermanPPI results overnight and slightly soft Chinese foreign investment inflows, the Dollar has remained out of favor.Perhaps the Dollar is under pressure because of expectations of a rise in US initial claims and because ofexpectations of only a minimal up-tick in the Philly Fed Business Index. In short, the bull camp needs stellar datajust to avoid a return to the early April low.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.