The bull camp has to be a little discouraged with the setback from the highs yesterday, as US data andhawkish Fed talk should have entrenched the Dollar at this week’s highs. Given somewhat soft Euro zone inflationreadings overnight (especially relative to US PPI data yesterday) that should have benefited the Dollar early thismorning but the Dollar seems to have lost some of its bullish capacity. Some players might suggest that the Dollarhas priced in better US data already with the recent bounce of 75 points and therefore the data this morning willhave to reconfirm the prospect of additional Fed Tapering prospects to engineer a return to and above theJanuary highs. The Dollar might be somewhat off balance this morning because of slightly higher global equitymarket action overnight. In looking forward, the Dollar is likely to see some minimally supportive CPI data, a slightup tick in the Philly Fed Business outlook result, but that news might be countervailed by an unchanged NAHBhousing market index report. Other impacts on the Dollar today might be seen from a speech from the former FedChairman and from US claims. Claims are expected to have risen minimally on the week and the change mightnot be enough to dominate the currency trade later this morning. March Dollar support is seen down at 81.04today and the path of least resistance is pointing upward.
Technical Outlook: A bullish signal was given with an upside crossover of the daily stochastics.Momentum studies are trending higher but have entered overbought levels. The market’s short-term trend ispositive on the close above the 9-day moving average. The market’s close above the 2nd swing resistancenumber is a bullish indication. The near-term upside target is at 81.56. The next area of resistance is around81.37 and 81.56, while 1st support hits today at 80.88 and below there at 80.56.