Dollar: With the US president holding back on damaging tweets over the last 12 hours sentiment toward the dollar has been restricted to modest losses.  It is possible that University of Michigan sentiment readings could give the dollar a temporary lift, but we suspect the dollar action today will be correlated tightly with US equities.  Initial support today in the September dollar index is seen down at 93.21 and then not until an old double high down at 92.97.  In order to put the bear camp back on its heels today probably requires a rally back above 93.99.

Sep ’17 Dollar Index Daily Chart

Euro:  The events in Spain certainly leave a negative element in place for the euro currency.  Strength in gold, treasuries and the Japanese yen overnight suggest that the environment for the euro favors the bear camp.  An issue adding to the bearish tilt in the euro is the fact that the euro zone current account surplus declined as that could give rise to further headlines of the negative economic influence from the massive rally in the euro over the last five months.  The concern of the negative impact of the high euro exchange rate was put in place by comments from the ECB earlier this week and that leaves a general fundamental negative sitting on top of the euro.  Initial support today is seen at 1.1725 and then again down at 1.1708.  In order to alter the negative technical picture in the euro today probably requires a rally back above a downtrend channel resistance line of 1.1792.

Sep ’17 Euro Index Daily Chart