We continue to think that the Dollar rally is overdone from a technical and fundamental perspective. The threat against the Bull camp should be increased by the potential for a US government showdown over acontinuing resolution to fund the government. As usual the US government was running on a temporary fundingagreement and with that resolution needing to be extended beyond September 30th, it appears that theimmigration issue might cause a showdown that could at least temporarily shut down the US government.Another issue that might be very important to the Dollar this morning is initial claims as the trade might needsomething positive from the first critical US data of the week to justify and confirm the lofty perch of theGreenback. The trend is up but we think the Dollar needs to get something positive from data to maintain abovethe 84.20 level on its charts.
Technical Outlook: The daily stochastics gave a bearish indicator with a crossover down.Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. Themarket’s short-term trend is positive on the close above the 9-day moving average. The market tilt is slightlynegative with the close under the pivot. The next downside target is 83.89. The 9-day RSI over 70 indicates themarket is approaching overbought levels. The next area of resistance is around 84.45 and 84.63, while 1stsupport hits today at 84.09 and below there at 83.89.