We are surprised that the Dollar is weaker this morning in the face of slack inflation and economic datafrom the Euro zone. However, the trade was disappointed in US retail sales yesterday and the trade might also belooking ahead to a modest rise in US initial claims later this morning with trepidation. Certainly trade expectationson US claims could be wrong but that report might set the tone for the entire trading session. We also think atemporary pause in key developments in the Ukraine situation is allowing the Dollar some corrective capacity asmajor decisions from the Russian President or the Red Cross might not be seen until late tonight or Fridaymorning. However, reports early this morning of artillery shelling of a Ukrainian city and statements from Putin that”Russians need to mobilize for the benefit of Russia” would seem to indicate another imperialist land grab mightbe ahead under the guise of aid that will be delivered with tanks and troop carriers. Putin might see legitimacy inan incursion by placing a loaf of bread on the barrel of his tanks! Buying support in the September Dollar is seenat 81.46 in the wake of the US claims report this morning.
Technical Outlook: Stochastics turning bearish at overbought levels will tend to support lower pricesif support levels are broken. The market’s short-term trend is positive on the close above the 9-day movingaverage. The daily closing price reversal up on the daily chart is somewhat positive. The close over the pivotswing is a somewhat positive setup. The next downside target is now at 81.30. The market is approachingoverbought levels with an RSI over 70. The next area of resistance is around 81.81 and 81.93, while 1st supporthits today at 81.50 and below there at 81.30.