Just when it appeared that the Dollar had the macro economic edge to rise to a fresh high for themove, data from Europe, up beat talk from the World economic forum and the prospect of an up tick in US initialclaims has prompted a reversal. It is also possible that comments from the US Treasury Secretary warning on thedebt ceiling served to undermine the Dollar, as many thought the US debt and deficit situation was going toremain in the background. With Euro zone PMI surveys pointing to an up tick in confidence, the US macroeconomic edge against one of the weaker segments of the world economy is reduced and the Dollar is seen asovervalued. A slide down to the 50 day moving average in the March Dollar is possible at 80.81 unless US dataon balance later this morning rekindles FOMC tapering expectations for next week’s US Fed meeting. If the Dollardoesn’t turn up in the face of scheduled data, a further downside targeting might be seen in the March Dollardown at 80.56.
Technical Outlook: Rising stochastics at overbought levels warrant some caution for bulls. Themarket’s close above the 9-day moving average suggests the short-term trend remains positive. The upside dailyclosing price reversal gives the market a bullish tilt. It is a mildly bullish indicator that the market closed over thepivot swing number. The next upside target is 81.52. The next area of resistance is around 81.45 and 81.52, while1st support hits today at 81.19 and below there at 81.01.