The Dollar looked set to charge higher against a long list of hapless currencies at the start of this week but a shift in data has reversed sentiment 180 degrees. With US scheduled data on Monday not only coming inweaker than expectations but also in contractionary territory and German ZEW figures much stronger thanexpected overnight, the onus is on the Dollar bulls to prove they can hold the Dollar within striking distance of itsrecent highs! A critical up trend channel support line is seen down at 87.38 today and the bull camp has to fearsome additional downside action in the event that US PPI readings actually register in negative ground as isexpected by the trade. An even lower support level in the December Dollar is seen down at 86.61.
Technical Outlook: Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. A positive signal for trend short-term was given on a close over the9-bar moving average. The upside daily closing price reversal gives the market a bullish tilt. The close over thepivot swing is a somewhat positive setup. The next downside objective is 87.00. The next area of resistance isaround 88.41 and 88.64, while 1st support hits today at 87.60 and below there at 87.00.