The Dollar remains in favor and capable of more upside action especially in the lead up to the coming FOMC meeting statement. However, the Dollar might not be expected to range up sharply on Fed dialogue alone on Wednesday as many feel the US Fed will be limited by the threat of a global currency debacle in the event that the Fed comes off overly hawkish on Wednesday. Apparently the storm will result in some US economic reports being released only on US government websites and the government also indicated there might be some delay in posting the data. Expectations calls for retail sales to rise modestly by +0.3% and for new residential home sales to be up by just under 3%. Also due out during the session is Case-Shiller home prices and a Richmond Fed Business Activity survey. Once again given the low bar set by activity outside of the US and given the proximity to the FOMC meeting, almost anything positive from the US data today is likely to rekindle the bid for the Dollar. Initial support in the March Dollar Index is seen at 94.76 and that support should rise to 94.95 on Wednesday.
Technical Outlook: A new contract high was made on the rally. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The close over the pivot swing is a somewhat positive setup. The next downside target is 94.46. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 95.76 and 96.25, while 1st support hits today at 94.87 and below there at 94.46.