After an outsized rally in the Dollar yesterday the Dollar bulls might have to face some music early today as the expectations for the first 3 scheduled US reports call for slack readings. While pending home sales later on are expected to show a modest gain we suspect that the Dollar will fall back early before finding support down at 94.63. A story that might have provided some of the strength in the Dollar yesterday were suggestions from the Fed’s Bullard that the markets could suddenly “wake-up” and re-price everything as US rates start to rise. Up-trend channel support in the March Dollar comes in at 94.19 and the 50 day moving average is seen all the way down at 93.18.
Technical Outlook: The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. The daily stochastics gave a bullish indicator with a crossover up. Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The cross over and close above the 18-day moving average is an indication the intermediate-term trend has turned positive. The outside day up is somewhat positive. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 96.38. The next area of resistance is around 96.03 and 96.38, while 1st support hits today at 94.70 and below there at 93.72.