The Dollar is deriving only limited buying interest in the wake of a series of safe haven headlines overnight and that highlights the lack of bullish resolve toward the Greenback. One might have expected bankingfears in Portugal, intense fighting in Gaza and softer than expected French and Italian Industrial production resultswould have given the Dollar more of a bid this morning. However, seeing the FOMC suggest that no changes ineasy money policies are in the cards should leave the Dollar under a wave of selling pressure. We suspect thatthe Dollar is destined to at least temporarily retest levels below 80.00 this morning and that more declines will beseen in the event that US initial claims rise by the expected amount. In short, without a fresh positive on the USeconomy, the path of least resistance in the Dollar looks to remain down.
Technical Outlook: Momentum studies are trending higher from mid-range, which should support amove higher if resistance levels are penetrated. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. The close below the 2nd swing support number puts the marketon the defensive. The near-term upside target is at 80.35. The next area of resistance is around 80.19 and 80.35,while 1st support hits today at 79.94 and below there at 79.86.