The Dollar is on the technical and fundamental rocks from months of anticipation that the US economy will consistently outperform most others, from ideas that the US Fed will hike rates sooner than others and also from a steady diet of safe haven interest flowing from geopolitical events and lastly from international flows toward US Treasuries. With almost all of those issues reaching full realization and or showing signs of reversing, it is not surprising to see the Dollar falling away from its recent highs. In fact, declining geopolitical safe haven interest is clearly declining even further in the wake of this week’s developments and with the stellar German GDP result seen this morning, even the US/Europe macro-economic differential edge is shrinking. In fact, unless US economic data firms significantly, the Dollar might be destined to fall back consistently ahead. Initial downside targeting in the March Dollar Index is seen down at 93.56 and perhaps not until the 93.38 level.
Technical Outlook: The downside crossover of the 9 and 18 bar moving average is a negative signal. A crossover down in the daily stochastics is a bearish signal. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. The close below the 2nd swing support number puts the market on the defensive. The next downside target is 93.41. The next area of resistance is around 94.79 and 95.45, while 1st support hits today at 93.77 and below there at 93.41.