While the Dollar is showing some modest early strength to start today, the currency has largely remained within the prior session’s trading range. Portions of the “trade” fear a dovish tilt from upcoming Feddialogue, as the Fed acknowledges the short term vulnerability in global growth and the residual threat ofdeflation. However, the fact is the Fed will culminate QE3 at the end of this week and the current slowing threatsmight also be seen as temporary, especially when one considers the potential upcoming windfall off lower oilprices. The US economic report slate is very active today, with expectations for an improvement in Durable goodsand another rise in the 20 city private home price survey. In conclusion, the Dollar might claw out some minorgains because of data flows today but the fear of the Fed might take the sting out of the bull’s case.
Technical Outlook: Stochastics are at mid-range but trending higher, which should reinforce a movehigher if resistance levels are taken out. The close below the 18-day moving average is an indication theintermediate-term trend has turned down. The market’s close below the 1st swing support number suggests amoderately negative setup for today. The near-term upside target is at 85.95. The next area of resistance isaround 85.77 and 85.95, while 1st support hits today at 85.46 and below there at 85.31.