The Dollar has consistently lost ground on the charts this week as overall macro economic psychologyhas improved. However, the improvement in global macro economic sentiment has been primarily brought on bygains in equities and by a couple marginally positive US scheduled data points. While equities haven’t started outdefinitively positive this morning the market was presented with a somewhat positive flow of data from Japanovernight and modest gains in UK manufacturing readings from December. In the end, the international economicnews flow is merely a sideshow in the lead up to the US Non Farm payroll report. As suggested in othercomments this morning, traders have to concede to the prospect of a surprisingly soft US data point because ofhistorically extreme weather conditions. Countervailing the prospects of a disappointing US payroll reading israther robust insistence from the Fed that consistent tapering will continue and that the US economy isrecovering. We think traders should look to sell a rally in the March Dollar Index back up to 81.62.
Technical Outlook: The upside crossover (9 above 18) of the moving averages suggests adeveloping short-term uptrend. Positive momentum studies in the neutral zone will tend to reinforce higher priceaction. The close below the 9-day moving average is a negative short-term indicator for trend. The market couldtake on a defensive posture with the daily closing price reversal down. The market’s close below the pivot swingnumber is a mildly negative setup. The near-term upside target is at 81.57. The next area of resistance is around81.25 and 81.57, while 1st support hits today at 80.71 and below there at 80.49.