The Dollar starts the Friday morning trade out on a positive track but still off its recent highs. In looking forward we see the potential for a slight setback off US scheduled data as Industrial production figures are expected to be unchanged and US CPI readings are expected to decline! Perhaps Michigan sentiment results will countervail weakness in early US data. Fortunately for the bull camp, the economic competition is almost nonexistent and all the Dollar bulls need is a set of numbers that avoid patently deflationary signals. Expectations that the EU will start big QE next week should also provide an underpin going forward, but it is possible that higher oil price action could rob the Dollar of some initial safe haven support. Up-trend channel support in the March Dollar index is seen down at 92.21 today and that support level rises to 92.41 early next week.
Technical Outlook: The rally brought the market to a new contract high. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The close above the 9-day moving average is a positive short-term indicator for trend. The daily closing price reversal up on the daily chart is somewhat positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside target is now at 90.66. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 93.43 and 94.26, while 1st support hits today at 91.63 and below there at 90.66.