Clearly the trade is unimpressed with the anticipated growth view in the US. Surprisingly the US growthrate is stronger than Europe and Japan but yet those currencies have been gaining on the Dollar since the USshowed a somewhat impressive non-farm payroll gain last Friday. Apparently the trade sees a slight beat in Eurozone Services PMI and retail sales as a significant development. With the Dollar falling to the lowest level sinceOctober 2013 on the weekly charts and no top tier US economic reports scheduled for release today, the slide inthe Dollar might be difficult to reverse until Wednesday or Thursday. In fact, we would suggest that the Dollarmight remain under pressure, until the US initial claims reading on Thursday and or until US claims fall back downtoward the “downside” breakout level on the charts of 300,000! The Dollar is oversold technically andfundamentally, but there doesn’t appear to be a catalyst to halt or reverse the slide today.
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.