Ongoing weakness in the Dollar to start is a little surprisingconsidering the slack US data from yesterday and also because of theescalating tensions in the Ukraine. Perhaps the trade is discounting the Dollar because of US efforts to leadincreased sanctions threats against Russia, as Putin has already suggested that retaliation will be primarilyagainst the US. It is understandable to press the Dollar downward off this week’s data flows, but once the Dollarreturns to the 79.50 consolidation lows, we doubt US fundamentals are weak enough to justify a downsidebreakout in the Dollar. Pushed into the market today we are short the Dollar, especially with Advance GDP, FlashPMI and Michigan sentiment due out later this morning.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.