The Dollar appears to be disappointed by the less than hawkish stance from the Fed and perhaps the Dollar is partially disappointed by the lack of strength in recent US scheduled data. In short, the Dollar looks to need something definitively supportive from today’s US scheduled data flow or the on-hold view could combine with the slight lessening of safe haven interest from the Greek debt extension, for a bearish environment for the Greenback. With some Fed members fearful of premature tightening damaging an already precarious deflationary condition of the US economy that should leave the Dollar vulnerable to a retest of the mid February lows. While the Dollar might draft some initial support from a minimal decline in US claims, the bull camp will need something positive from both leading indicators and the Philly Fed Business outlook to reverse the erosive February bias. Critical up-trend channel support is seen down at 93.90 today and that potentially critical pivot point rises to 93.99 on Friday. In the face of disappointing scheduled US data later today, we would not be surprised to see a downside breakout in the Dollar.
Technical Outlook: The upside crossover of the 9 and 18 bar moving average is a positive signal. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The daily closing price reversal down puts the market on the defensive. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 93.66. The next area of resistance is around 94.43 and 94.82, while 1st support hits today at 93.86 and below there at 93.66.