A significant downside failure on the Dollar charts overnight probably unnerves the bull camp and setsthe stage for at least a temporary probe back below the 80.00 level. Some players suggest that the slide in theDollar is the result of less than stellar payroll data while others point to the positive UK industrial output figuresand favorable European auto sales results as the reason behind the Dollar washout this morning. One almostgets a sense that the trade is expecting something dovish from the FOMC meeting minutes but comments fromthe BOJ overnight appears to have been the main catalyst behind the Dollar slide. The Dollar might temporarilyslide below 80.00 but those getting short the Dollar at or below current levels would appear to be assuming anunnecessary risk ahead of the release of the Fed meeting minutes on Wednesday. In fact, even if the Fed was alittle concerned about the ongoing drag of winter weather, the trade has probably factored that temporary elementinto prices with the current slide. Aggressive traders could buy the June Dollar on a dip to 79.90.
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.