The Dollar would appear to be priced for perfection into the Non-farm payroll release. However, it is also possible that the Dollar trade will be able to shape anemic data into a positive after some negative initial knee jerk reactions. Traders should expect increased volatility in the Dollar after this week’s low to high upside extension of 164 points. From the February lows, the Dollar has managed a gain of 336 points! In short, we see a number below most estimates but the weakness in the Dollar off the report will probably be reversed ahead of the close today as the readings are discounted as weather related and also because of one-off energy related layoffs. Up-trend channel support in the Dollar this morning is seen down at 96.07 but traders should be advised of a possible weather delay in the release of the numbers this morning.
Technical Outlook: The market made a new contract high on the rally. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 97.07. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 96.78 and 97.07, while 1st support hits today at 96.03 and below there at 95.57.