The Dollar remains in control as international economic data was soft overnight. Chinese data wasweak and while Euro zone data was positive, the trade discounted that news by suggesting companies in Europehad to slash prices to maintain positive sales patterns. Other issues that might be providing the Dollar with somelift, is ongoing talk that the US might be closer to rising rates than was assumed prior to the Fed meeting lastweek. While Fed comments might have been spun into an overly hawkish track, talk of stimulus needs in bothEurope and China, clearly leaves the US Dollar with an interest rate differential edge. However, the US economywill be measured against the rest of the world this morning, in the wake of its flash PMI manufacturing results forMarch. The trade will also take some direction from a Chicago Fed National Activity Index report, as the marketsare still seeking clarification on the duration of adverse North American weather. In short, there is a low bar for USdata, almost anything positive from the data window should pave the way for the June Dollar to rise above 80.50.The Commitments of Traders Futures and Options report as of March 18th for US Dollar showed Non-Commercial traders were net short 12,167 contracts, an increase of 11,970 contracts. The Commercial traderswere net long 7,043 contracts, an increase of 12,018 contracts which represents a change from a net short to netlong position. The Non-reportable traders were net long 5,126 contracts, a decrease of 46 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 7,041 contracts. These tradershave gone from a net long to a net short position.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.