ADP reported that U.S. companies added 9,000 jobs. This was much better than pre-report estimates of a 59,000 job decline. Traders interpreted this as a sign the U.S. economy is showing small signs of a recovery. Some traders brushed off the number, instead feeling the U.S. Non-farm Payroll Report on Friday would be a more important indicator of the start of a recovery.

The Fed's action to extend the deadline for access to the borrowing window by investment firms was interpreted as a sign that the financial markets are still too weak to operate efficiently and effectively without the Fed's assistance.

In addition to the news from ADP and the Fed, a Euro Zone confidence index fell 5.3 points to 89.5 in July. This was the biggest one month break since September 2001. This is just another indication that the global economic slowdown has spread to the European nations.

One more sign that the selling is strong in the EUR USD is the inability to rally despite a surge in crude oil prices.

The charts indicate a move to 1.5472 is likely. Look for selling opportunities as long as this pair continues to make lower tops and lower bottoms.

The USD JPY traded firm on Wednesday as a rally in U.S. stock markets provided the support. Despite the strong rally in equities, the USD JPY could not attract enough buying interest to drive this market through a pair of old tops at 108.42 and 108.59. A move through these two levels is likely to trigger buying interest all the way up to 109.94.

The GBP USD rallied on technical factors as the bearish fundamentals are indicating that this market is on the brink of a possible recession. After an eleven day break from its recent top, this pair was ripe for a short-covering rally. The inability to change the trend to down on this current break provided a reason for shorts to cover.

Technically, this market has to hold above 1.9748 in order to remain in a strong position to rally. A key down trending angle from the recent top has been walking this market down for eleven days. This resistance angle comes in tomorrow at 1.9917. A rally through this angle would run into retracement resistance at 1.9951 to 2.0000.

The USD CHF continued its breakout rally supported by the strong surge in the U.S. stock market. The strong close has this market in a position to run stops over the June 13 main top at 1.0541. More buying could accelerate this market to a major resistance cluster at 1.0625 to 1.0630. Look for selling on the first test of this price zone. With the main trend up, look to buy a break back to 1.0490. Continued confidence in the U.S. financial markets will encourage traders to borrow in Swiss and invest in U.S. Dollars.

The USD CAD finally closed lower after a long rally from .9973 to 1.0269. Traders took profits after a strong rally in crude oil due to a lower than expected Gasoline supply number. The USD CAD had been rallying since July 15 as commodity prices weakened. Traders believed that the break in commodities, especially crude oil and gold, would weaken the Canadian economy because of its reliance on exports. Wednesday’s break could retrace back to 1.0123 to 1.0088.

The AUD USD traded sharply lower as home building approvals unexpectedly dropped in June. Australian Dollar traders are beginning to realize that there are substantial downside risks to holding long positions as they are beginning to worry about the stability of the Australian economy. Financial market traders are increasing bets of a possible interest rate cut. The charts indicate that .7427 is the key support price. If this price breaks, then look for the move to continue down to .9326.

The New Zealand Dollar fell once again on the news that New Zealand Guardian Trust Co. suspended investments and withdrawals and the negative comments from Reserve Bank Governor Bollard.

The action by New Zealand Guardian Trust is a sign the global credit crisis is spreading. This action was taken to prevent a run on the trust. RBNZ Governor Bollard said borrowing costs "have room to fall." He also stated that "weakness in the economy will be sufficient to bring inflation and inflation expectations down over the medium term." Both of these statements weighed on the NZD USD as traders interpret them to mean that interest rates will continue to decline. Technically, the next downside targets are .7262 and .7241.

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