The Dollar continues to hold the edge as fears of further slowing in Europe off the Russian sanctionshas combined with mostly positive US scheduled data for a currency that is head and shoulders above the rest. Infact, the only currency currently capable of standing up to the Dollar is the Yen which in turn is benefiting from anincrease in global safe haven interest. While US scheduled data yesterday wasn’t stellar, the US data trend ispositive and the US appears to be insulated from most of the Russian sanctions influences. Adding into theDollar’s edge this morning is news of weaker than expected UK Factory order readings in June and press reportsthat Italy slipped back into recession status with its lack of activity in the 2nd quarter. Another issue adding intothe upward track in the Dollar this morning is news that German June manufacturing orders declined sharply. USscheduled data today is limited to weekly mortgage applications and Trade Balance figures and that could restrainthe upward motion in the Dollar.
Technical Outlook: Daily stochastics turning lower from overbought levels is bearish and will tend toreinforce a downside break especially if near term support is penetrated. The close above the 9-day movingaverage is a positive short-term indicator for trend. There could be more upside follow through since the marketclosed above the 2nd swing resistance. The next downside target is now at 81.23. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 81.75 and 81.89, while 1stsupport hits today at 81.43 and below there at 81.23.