The Dollar has generally sagged on the charts over the last two weeks despite rising US rate talk, stellar Non-farm payroll results and even in the face of rekindled safe haven interest off the Ukraine and Greece. Therefore the market seems to have priced in a mid-summer rate hike but it also appears as if the Dollar is starting to lose some of its macro-economic differential edge particularly with the Euro zone and the UK. In fact, we suspect that some of the declines in the Dollar over the last two weeks were the result of improving German ZEW data and impressive UK employment results. A significant up trend channel support line sits down at 93.97 in the March Dollar index and therefore the prospect of fresh technical damage on the charts ahead could become even more acute today if the US FOMC meeting minutes this afternoon fail to markedly lift the Dollar.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal down puts the market on the defensive. The market’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at 93.46. The next area of resistance is around 94.49 and 94.86, while 1st support hits today at 93.79 and below there at 93.46.