British Pound (BPH9):
The BP opened higher at 1.3821 after Barclay's PLC announced that it would not need the additional capital and would report a pretax profit 'well ahead' of the 5.3B pound consensus forecast. Prices rose to a morning Hi of 1.3960 as increased 'risk-appetite' decreased the safe-haven play of the DX. As we move into the afternoon session, prices continue to trade above our initial Resistance level of 1.3927. The BP rose to a daily Hi of 1.3987l, before trailing lower into the close of 1.3930, up 177 tics. The short-covering rally will need further buying to change the 'negative' s/t trend. Momentum indicators remain weak as prices are in a basing consolidation range over the last four session. Traders will look for more help from a weaker DX and further short-covering to reduce the fear of lower prices. The two-day FOMC meeting should see rates remain 'unchanged'. A higher open should find Resistance at 1.4099 and 1.4269, while an open below 1.3818 may find Support at 1.3648 and 1.3367.
Dollar Index (DXH9):
The DX opened lower at 85.885 as enthusiasm in the equity markets saw less need of the safe-haven play in the DX and Treasuries. Prices retraced to a morning Lo of 85.04 and continued to be pressured by a short-covering rally in the BP and EC. Prices hit a mid-day Lo at our secondary Support level of 84.89 and bounced to a 'day-session' close of 85.195, down 99.5 tics.The close below the 9-day MA changes the s/t trend 'negative' w/ turning momentum indicators. The start of a two-day FOMC meeting should result in rates remaining 'unchanged' with more emphasis on the commentary going forward. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 84.43 and 83.67, while an open above 85.64 should find Resistance at 86.40 and 87.61.
Canadian Dollar (CDH9):
The CD opened higher at .8184 and followed most other major foreign currencies higher as the DX retraced. Prices rose to a morning Hi of .8234, before drifting to a mid-day level of .8183. Higher energy/metals prices have been supportive of higher prices, but soon reversed, sending the CD lower into the close of .8156, up 56 tics. The s/t trend remains 'positive' w/neutral momentum indicators. Prices will look to chanllenge the .8500 level, but will need support of higher oil prices and better export numbers. A higher open should find Resistance at .8868 and.8961, while an open below .8153 may find Support at .8071 and .7987.
Euro Currency (ECH9):
The EC opened higher at 1.3001 as increased 'risk-appetite' saw higher equity prices and lower prices in safe haven DX and Treasuries. Prices rose to a daily high at our secondary Resistance level of 1.3197, before trailing lower towards the close of 1.3125, up 158 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ weak momentum indicators. The short-covering rally will need further buying from bargain hunters to see higher prices in the face of further possible rate cuts at the next ECB rate meeting. Traders will look to sell the rallies ahead of the need for further rate cuts. A higher open should find Resistance at 1.1341 and 1.1432, while an open below 1.3058 may find Support at 1.2919 and 1.2713.
Japanese Yen (JYH9):
The JY opened lower at 1.1233 and bounced to a morning Hi of 1.1247 on DX weakness, before retracing to a morning Lo at our initial Support level of 1.1157. Increased risk-appetite saw carry-traders borrowing JY to pruchase higher yielding assets. Prices bounced into the afternoon session to our Pivot level of 1.1266, before trailing lower into the close of 1.1250, down 22 tics. The s/t trend remains 'positive' w/ firm momentum indicators. The safe-haven aspect of the JY will continue to be attractive to traders, despite the weakening economy. A higher open should find Resistance at 1.1341 and 1.1432, while an open below 1.1249 may find Support at 1.1158 and 1.1066.