The US Dollar remains in clear cut vogue relative to a long list of currencies and that edge was givenadded credence overnight in the wake of another wave of slack international data points. For instance, Euro zonebusiness growth for last month posted the weakest result of the year and that news comes on the heels of a lessthan respected ECB QE move! With weak numbers also noted from China and the trade looking ahead to positiveUS Non-farm payroll results later this morning, the macro-economic differential looks to remain squarely in favorof the Greenback. With the Dollar seeing some back and fill action earlier this week, the overbought technicalcondition was balanced and that in turn could allow the Dollar to rally later today off minimally positive payrollresults. Given current estimates anything above +200,000 probably drives the $ higher, especially if that readingis accompanied by an upward revision in last month’s payroll reading. Given the international data, we have towonder if the Dollar isn’t poised for a blow-off rally that sends the Dollar to the highest level seen since June of2010.
Technical Outlook: Daily stochastics turning lower from overbought levels is bearish and will tend toreinforce a downside break especially if near term support is penetrated. The market’s close above the 9-daymoving average suggests the short-term trend remains positive. The market’s close below the 1st swing supportnumber suggests a moderately negative setup for today. The next downside objective is now at 85.29. The nextarea of resistance is around 85.96 and 86.23, while 1st support hits today at 85.50 and below there at 85.29.