The Dollar remains vulnerable to macro economic differential pressure as a result of the disappointingUS Non Farm payroll report. However, upcoming testimony from the New Fed Chair might be expected to lendsome support to the Dollar, as the Fed can hardly cast doubt on the recovery and hint at slowing of forwardmomentum given their recent support of more tapering ahead. Apparently the Fed will release its preparedremarks early Tuesday morning and that temporarily distracts the market from regularly scheduled data flows.The Dollar does appear to have found some support from the 100 day moving average that came in down at80.67 on Friday. We also can’t rule out a slide down to consolidation support down at 80.47 in the March Dollarbefore the Fed testimony and GOP demands for more aggressive US tapering efforts, serves to lift the dollar outof its two week slide. The Commitments of Traders Futures and Options report as of February 4th for US Dollarshowed Non-Commercial traders were net long 4,805 contracts, an increase of 996 contracts. The Commercialtraders were net short 11,685 contracts, an increase of 1,392 contracts. The Non-reportable traders were net long6,879 contracts, an increase of 396 contracts. Non-Commercial and Non-reportable combined traders held a netlong position of 11,684 contracts. This represents an increase of 1,392 contracts in the net long position held bythese traders.
Technical Outlook: The major trend has turned down with the cross over back below the 60-daymoving average. A bearish signal was triggered on a crossover down in the daily stochastics. Decliningmomentum studies in the neutral zone will tend to reinforce lower price action. The market back below the 18-daymoving average suggests the intermediate-term trend could be turning down. The market’s close below the pivotswing number is a mildly negative setup. The next downside target is 80.35. The next area of resistance is around80.98 and 81.27, while 1st support hits today at 80.53 and below there at 80.35.