A huge range down failure in the Dollar overnight seems to be the result of a lack of clarity from the USeconomic situation. In short, a long pattern of weak US data flows, combined with suggestions from the FedChairman that the Fed is uncertain on the importance of the adverse weather, has left the Dollar out of favor. It isalso possible that actions by the PBOC overnight contributed to the slide in the Greenback overnight. Otherssuggest that comments from the Fed that US inflation continues to run significantly under the Fed’s target levelscombined with talk that US tapering is not in a pre-determined locked and loaded status has paved the way for asignificant downward adjustment in the Dollar. In the near term, the prospect of more soft US data, expectationsof a soft payroll reading next Friday and flight to quality interest flowing to the Euro, Yen and Swiss, leaves thebear camp in the $ in the driver’s seat. In short, a slide toward the December lows in the Dollar might be expectedas the trade moves to factor in something beyond temporary weather impacted slowing.
Technical Outlook: The stochastics indicators are rising from oversold levels, which is bullish andshould support higher prices. A positive signal for trend short-term was given on a close over the 9-bar movingaverage. The daily closing price reversal down is a negative indicator for prices. The market’s close below thepivot swing number is a mildly negative setup. The next upside objective is 80.70. The next area of resistance isaround 80.46 and 80.70, while 1st support hits today at 80.12 and below there at 80.02.