Euro Currency (ECM9):
The EC opened lower 1.3236 and slid to a morning Lo of 1.3212, as weaker than expected German Mfg. Orders showing a drop of -3.5% exceded the expected -2.7%. Lower exports also weighed on prices as the economy continues to show further 'slowing'. Prices rose to a morning Hi of 1.3306, following equity prices and a weaker DX. Prices drifted lower towards the close and ended the session at 1.3230, down 22 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. The rebound off the daily Lo could see a firm open. Traders will see if equity managers are willing to take on more 'risk tolerance' as we enter the earnings reporting period, which could benefit the EC, as the DX would see less 'safe-haven' buyers. A lower open may find Support at 1.3181 and 1.3110, while an open above 1.3294 should find Resistance at 1.3365 and 1.3478.
Dollar Index (DXM9):
The DX opened higher at 85.57 and rose to a morning Hi of 85.83 as equity prices gave up early gains. As equity prices moved higher, the DX saw traders rotate out of the 'safe-have' and into the equities, sending the DX to a mid-day Lo of 85.32. The release of the FOMC minutes showed concern that unemployment levels are expected to increase thru the end of 09' and into 2010, sending the DX higher into the close and ending the day-session at 85.72, up 5 tics. Risk-Tolerance vs. Risk Avoidance? As equity markets move higher after the day-session close of the DX, higher equity prices over-seas could weigh on the DX. The s/t trend remains 'positive' w/ neutral momentum indicators. A higher open should find Resistance at 86.00 and 86.33, while an open below 85.50 may find Support at 85.17 and 84.67.