A slight retrenchment in the Dollar this morning is to be expected after the upside extension early in the week. One also has to think that news of US air strikes inside Iraq have dealt the Dollar a geopolitical setback.However, the Dollar should be underpinned by yesterday’s fresh downside breakout in claims and it is alsopossible that US productivity readings later this morning provide some very minor support to the Dollar. Fallingproductivity in the US could prompt talk that the US labor market slack is gradually leaving. However, it is unlikelythat productivity readings will provide a noted reaction today. The bears have a minor and temporary edge.
Technical Outlook: Stochastics turning bearish at overbought levels will tend to support lower pricesif support levels are broken. The close above the 9-day moving average is a positive short-term indicator fortrend. The daily closing price reversal up on the daily chart is somewhat positive. With the close higher than thepivot swing number, the market is in a slightly bullish posture. The next downside objective is 81.32. The 9-dayRSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 81.73and 81.86, while 1st support hits today at 81.46 and below there at 81.32.