Clearly the Dollar has seen some short covering this week ahead of the FOMC statement but one can’tcome away from US data flows this week with an overly positive view toward the Greenback. One might suggestthat relatively, US data hasn’t been that bad, but data has been disjointed enough that some high bar non-farmpayroll estimates might be pulled downward. At this point, we would be very surprised to see a US Non-Farmpayroll gain above the prior month’s gain of +192,000. Some Non-Farm payroll estimates call for a gain of+215,000 and that is a very tall order considering the mixed to weak data that has been released over the last twoweeks. In fact, after a compacted rally back above 80.00 early this morning, the Dollar has fallen back in the wakeof an up-tick in UK and Euro zone inflation readings and perhaps because German April jobless readings declineda little more than expectations. Now that the Dollar has recovered back to 80.00 we are even more comfortable inselling an FOMC inspired rally.
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.