The Dollar has started the Tuesday session on a negative track, with a lower low and the lowest pricesince January 29th. Apparently portions of the currency trade, portions of the equity market and some preciousmetals players think that US data has been soft enough to increase the odds of a pause in the US taper. In reality,the financial markets are probably only looking for hints that the Fed will pause tapering, in the event that US dataremains weak. In other words, the Dollar bears might be able to find what they are looking for in the question andanswer period of the Fed testimony today. The Dollar might also be seeing some pressure from favorable UKJanuary retail sales figures and perhaps the Dollar is also under pressure because of expectations of a decline ina US small business optimism index reading scheduled for release later this morning. The bear camp controlsahead of Yellen but we suspect that Dollar declines will at least be temporarily arrested once it is clear the Fedwill continue to taper and that the Fed also thinks the economy is still recovering. Logical support in the MarchDollar is seen down at 80.51.
Technical Outlook: Stochastics trending lower at midrange will tend to reinforce a move lowerespecially if support levels are taken out. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The next downside target is80.56. The next area of resistance is around 80.78 and 80.90, while 1st support hits today at 80.62 and belowthere at 80.56.