While the Dollar might be somewhat overdone technically, US data so far this week leaves the Greenback with a definitive macro-economic differential edge. However, the trade might not see definitively supportive economic data this morning, as US claims are not expected to see much change. On the other hand, the economic bar from the rest of the world is extremely low, oil prices are showing some early weakness and S&P is considering a reduction in Russia’s credit rating to junk status and that should provide the Dollar with underlying fundamental support. Up-trend channel support in the March Dollar is seen down at 89.79 but closer in support at even numbers of 90.00 might be sufficient to hold up the Dollar.
Technical Outlook: The rally brought the market to a new contract high. Rising stochastics at overbought levels warrant some caution for bulls. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The market’s close above the 2nd swing resistance number is a bullish indication. The next upside target is 90.79. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 90.63 and 90.79, while 1st support hits today at 90.07 and below there at 89.68.