British Pound (BPH9):
The BP opened lower at 1.3862 after PM Gordan Brown said he will spend an additional $142 B to support the nation's banks and provide continued bail-out help for Royal Bank of Scotland Group Plc. This latest support comes after the $71B package in October. Prices bounced to a mid-day level of 1.4038 and drifted lower through to a close of 1.3908, down 738 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Continued concern in the banking/financial sector will lead to further rate cuts at the Feb. 5th BoE rate meeting, possibly 50bps - 100bps or 'whatever it takes' philosophy to right the ship. We could see a test of the June 01' low of 1.3700. Be aware of 'weak' shorts taking risk/profit off the table. A Lower open may find Support at 1.2686 and 1.2498, while an open above 1.3025 should find Resistance at 1.3213 and 1.3552.
Dollar Index (DXH9):
The DX opened higher at 86.86 after selling pressure in Sterling, a rate cut by the BoC and weakness in equity markets led to increased risk-aversion, benefitting the safe-haven of Dollars. Prices drifted lower to a mid-day level of 86.465, before bouncing into the afternoon session and hitting a daily Hi of 87.05 and sliding to a 'day-session' close of 86.875, up 151 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A higher open should find Resistance at 87.30 and 87.73, while an open below 86.61 may find Support at 86.18 and 85.49.
Canadian Dollar (CDH9):
The CD opened lower at .7900 and retraced to a morning Lo of .7870 after the BoC reduced s/t rates 50bp to 1.0%. Prices bounced to a morning Hi of .7965, before drifting lower towards the close to end the session at .7900, down 83 tics. Lower oil prices along with a decrease in exports continue to weigh on the economy. The BoC also signaled it was prepared to cut rates further to help the economy combat the recession. The s/t trend remains 'negative' w/ weak momentum indicators. Look for a test of the previous Target Lo of .7693, as traders follow the DX and Crude for direction.A lower open may find Support at .7820 and .7741, while an open above .7950 should find Resistance at .8029 and .8159.