The well-defined up-trend pattern in the Dollar remains in place and while there might be a wave of selling pressure this morning in the wake of an ECB easing move of $696 billion (if that is indeed the size of the QE program) that should be temporary as the Euro zone remains vulnerable to the Greece election over the weekend and the US Dollar might also garner some support from a decline in US initial claims later this morning. As has been the case for most of the last two months, almost anything positive from the US data front promises to support the dollar, but once has to concede to at least a temporary setback off the ECB’s headline effort to head off deflation. Up-trend channel support in the March Dollar Index is seen at 92.39 this morning and that support rises to 92.57 on Friday. In order to derail the Dollar trend probably requires a definitive surprise jump in US claims but with claims expected to come in near 300,000 (our growth/no growth zone) it is very difficult to take macro-economic differential control away from the Dollar bulls.
Technical Outlook: The daily stochastics gave a bearish indicator with a crossover down. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The market setup is somewhat negative with the close under the 1st swing support. The next downside objective is 91.98. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 93.51 and 93.90, while 1st support hits today at 92.56 and below there at 91.98.