We are surprised that the Dollar is tracking higher this morning as overnight economic data points fromthe Euro zone and the UK were positive and expectations for the US Non-farm payroll report later this morningwould appear to set a negative bias in place for the Greenback. However, the Dollar is higher as the residualweakness in the Euro, from the easing moves and from the prospect of more easing from the ECB still rings in themarketplace. On the other hand, overnight data from the Euro zone calls further ECB easing action into questionand that could cap the Dollar’s strength. Furthermore, it could be difficult for the Dollar to rise through today’s dataunless the readings come in above expectations. In our view a 215,000 payroll gain or less, could serve to extendthe Dollar back down toward the 80.00 level on the charts. It does seem as if the Dollar at 81.00 was judged to betoo expensive earlier this week.
Technical Outlook: A crossover down in the daily stochastics is a bearish signal. Momentum studiesare trending lower from high levels which should accelerate a move lower on a break below the 1st swing support.The market’s short-term trend is negative as the close remains below the 9-day moving average. The outside daydown is a negative signal. There could be some early pressure today given the market’s negative setup with theclose below the 2nd swing support. The next downside objective is 79.82. The next area of resistance is around80.72 and 81.25, while 1st support hits today at 80.00 and below there at 79.82.