The Dollar starts the Friday session under fresh pressure and at the lowest level since January 2nd.While the March Dollar filled a gap in the March Dollar Index the at 80.43 to 80.35 level, that level could now beseen as a resistance area. While this week’s scheduled US data was a little suspect, the data yesterday wasapparently weak enough to pull down tapering fears and that leaves the Dollar in a fundamentally bearishposition. However, cushioning the Dollar against more significant downside action is growing concern off sharpdeclines in emerging market currencies. However, news that European banks are poised to pay back another 3.7billion Euro in crisis loans next week and renewed flight to quality interest in the Swiss and Yen overnight, shouldleave the Dollar in a downward motion on the charts today. In fact, news that a flurry of central banks plan toreduce dollar based fund offerings that were implemented in the face of the financial crisis, would seem to add tothe Dollars downside prospects. Next downside targeting in the March Dollar is 80.00.
Technical Outlook: The close below the 60-day moving average is an indication the longer-termtrend has turned down. The daily stochastics have crossed over down which is a bearish indication. Stochasticstrending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. Themarket back below the 18-day moving average suggests the intermediate-term trend could be turning down. Anegative signal was given by the outside day down. There could be some early pressure today given the market’snegative setup with the close below the 2nd swing support. The next downside target is now at 79.82. The nextarea of resistance is around 80.95 and 81.63, while 1st support hits today at 80.05 and below there at 79.82.