The dollar has been temporarily undermined by a surprise move by the SNB to remove a cap on the Swiss/Euro exchange rate. While the Dollar is trading well off its highs from earlier this week, we don’t see the overnight events as a lasting limit against more upside action in the Greenback ahead. In fact, seeing the Swiss explode overnight might actually increase the safe haven standing of the Dollar and it might also reverse the windfall for Swiss exporters ahead. The Fed Beige book showed continued growth in most regions, but apparently the markets were scouring the report for cracks in the US economy, as some analysts focused on the prospect of weakening in Texas and North Dakota because of the slide in oil prices. Others pointed to the lack of wage pressures in the Beige book and that simply highlights a prevailing negative economic bias inside and outside of the US. In the end, traders and investors should continue to favor the safety of US holdings, as the US Fed is still thought to be capable of managing conditions better than other central banks. Lastly, the US economy is clearly operating at a stronger level than others and therefore Dollar investments should be expected to outperform most others. Up-trend channel support in the March Dollar today moves up to 91.67.
Technical Outlook: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. The next downside objective is 91.44. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 92.73 and 93.10, while 1st support hits today at 91.91 and below there at 91.44.