Dollar Index (DXM9):
The DX opened lower at 85.56 in 'thin' Holiday trading, with Europe and China markets closed. Prices retraced initially on concerns that China may need to reduce purchasing our Treasury Debt, which will be reflected in the Treasury Capital Flows report on Wednesday. As equity markets bounced from morning session lows, expectations that traders could see better than expected earnings in 'bank' stocks, the DX slid to an intra-day Lo of 84.835, before ending the day-session at 84.93, down 113 tics. The close below the 10-day MA changes the s/t trend to 'negative', w/neutral momentum indicators. Traders will look at overseas equity markets for a key and await the PPI and Retail Sales report at 8:30 am et, before committing positions. A lower open may find Support at 84.42 and 83.92, while an open above 85.32 should find Resistance at 85.82 and 86.72.
Euro Currency (ECM9):
The EC opened higher at 1.3228 during the extended Holiday session in thin trading and rose against the weaker DX. As concern increases about the upcoming Treasury Capital report on Wednesday sent the DX lower, traders rotated into the EC and other major foreign currency markets, sending the EC to a morning Hi of 1.3377, before drifting lower as we enter the afternoon session. A late afternoon equity rally weighed on the DX, sending the EC to a close of 1.3355, up 212 tics. The close above the 10-day MA changed the s/t trend to 'positive' w/ neutral momentum indicators. Traders will key on the DX for direction and U.S. economic data at 8:30 am et. A higher open should find Resistance at 1.3447 and 1.3539, while an open below 1.3285 may find Support at 1.3193 and 1.3031.