The Dollar has shown only modest recovery action despite events that might have vaulted theGreenback sharply higher. Therefore the Dollar is out of favor and seemingly hamstrung by the fear of soft USdata and perhaps even hints of a temporary pause in Fed tapering. While US data later today is 2nd and 3rd tier,expectations call for weakness and expectations for this Friday’s February Non Farm payroll result might also beweighing on the Dollar. Expectations for the Friday US non farm payroll headline result is another issue that mightbe keeping the Dollar from getting a lift off the Ukraine situation today. While we think that the Dollar will remainpinned down off upcoming US data flows, the Non farm payroll reading on Friday might coincide with the brunt ofthe soft data associated with the extreme US weather. Pushed into the market we would prefer to sell rallieslooking for a possible temporary retest of the December low of 79.50. The Commitments of Traders Futures andOptions report as of February 25th for US Dollar showed Non-Commercial traders were net short 257 contracts,an increase of 2,629 contracts which represents a change from a net long to net short position. The Commercialtraders were net short 6,388 contracts, a decrease of 2,904 contracts. The Non-reportable traders were net long6,644 contracts, a decrease of 275 contracts. Non-Commercial and Non-reportable combined traders held a netlong position of 6,387 contracts. This represents a decrease of 2,904 contracts in the net long position held bythese traders.
Technical Outlook: A crossover down in the daily stochastics is a bearish signal. Daily stochasticsdeclining into oversold territory suggest the selling may be drying up soon. The market’s short-term trend isnegative as the close remains below the 9-day moving average. There could be some early pressure today giventhe market’s negative setup with the close below the 2nd swing support. The next downside target is now at79.28. The next area of resistance is around 80.09 and 80.52, while 1st support hits today at 79.48 and belowthere at 79.28.