The Dollar is deservedly weaker this morning in the wake of the net result from the December Nonfarm payrolls last week and also because of a positive Euro Zone Industrial Production release overnight. Apparently sentiment is surfacing that severe cold weather hindered the US economy, while some economists aresuggesting that the weather had nothing to do with the soft December data and that the December slowing waspart of a developing trend of softer US data points. The market isn’t sure how to take recent comments from theFed, as Lockhart yesterday said he remained in favor of more tapering but he also warned that the jobs marketmust be watched closely. Today’s US retail sales are expected to be up slightly but that report doesn’t look to be adominating issue for the trade unless the report is off expectations. The trade will probably take most of itsdirection from several Fed speeches today as the weakness in the Dollar over the prior 5 trading sessions isprobably the result of a reduction in near term tapering fears. With equities showing noted weakness and negativeInvestment Bank economic views being floated recently the path of least resistance in the Dollar might remain infavor of the bear camp. Near term targeting is the top of an old gap area down at 80.43.
Technical Outlook: The market back below the 40-day moving average suggests the longer-termtrend could be turning down. Declining momentum studies in the neutral zone will tend to reinforce lower priceaction. The market back below the 18-day moving average suggests the intermediate-term trend could be turningdown. The market tilt is slightly negative with the close under the pivot. The next downside objective is now at80.37. The next area of resistance is around 80.76 and 80.95, while 1st support hits today at 80.48 and belowthere at 80.37.