Dollar Index (DXU8):

The DX opened higher at 74.05 as traders continue to focus on the likelihood that the Fed will increase s/t interest rates before year-end. Prices bounced to a morning Hi of 74.08, before sliding to a morning Lo at our Pivot level of 73.90 and bouncing into the afternoon session. Weaker equity prices and higher oil sent the DX to a mid-day Lo of 73.80, before ending the session at 73.84, down 8 tics. The close below the 9-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators. More 'jawboning' ahead to support the DX, while awaiting results from this weekends meeting with OPEC members, to see if they will allocate more production to relieve higher Oil prices, or justify leaving production where it is. Traders will await Jobless Claims and Philly Fed Survey to determine direction. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 73.69 and 73.55, while an open above 73.95 should find Resistance at 74.09 and 74.34.

British Pound (BPU8):

The BP opened lower at 1.9403 after release of the June MPC minutes showing an 8-1 vote in favor of leaving rates 'unchanged' at 5.0%. While the ECB and Federal Reserve have been 'hawkish' in containing inflation and possibly raising rates, which has weighed on prices. As the DX retraced, the BP rose to a mid-day Hi of 1.9463, before drifting lower in early afternoon trading. As the DX drifted lower the BP rebounded to 1.9459, before ending the day at 1.9465, up 28 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ neutral momentum indicators. With no plan to increase rates, the BP may not be as attractive as the EC, but the BoE can lower rates by 25bp to stimulate the weak economy and still be competitive with a higher EC yield. We shall see. A higher open should find Resistance at 1.9514 and 1.9562, while an open below 1.9431 may find Support at 1.9383 and 1.9300.

Canadian Dollar (CDU8):

The CD opened lower at .9801 and slid to a morning Lo of .9785, before rebounding along with higher oil/metal prices to a mid-day Hi of .9826. Prices drifted lower towards the close and ended the session at .9809, down 9 tics. The s/t trend remains 'positve' w/ improving momentum indicators. Higher energy/metals prices and a weaker DX were supportive. If the anticipated rate 'cut' is now off the table, traders may find the CD more attractive. A higher open should find Resistance at .9829 and .9849, while an open below .9806 may find Support at .9786 and .9763.

Euro Currency (ECU8):

The EC opened lower at 1.5429 and slid to a morning Lo at our initial Support level of 1.5404, before a weaker DX and higher commodity prices sent the EC to a mid-day Hi of 1.5464. Higher commodity prices continue to merit the 'hawkish' tone of the ECB's need for a possible rate increase at next months rate meeting. Prices rose to a daily Hi of 1.5466, before closing at 1.5458, up 13 tics. The close above the 9-day MA changes the s/t trend to 'positive' w/ neutral momentum indicators. The proposed rate increase and a higher yield will continue to attract buyers, until the ECB retracts its 'hawkish' tone. A higher open should find Resistance at 1.5489 and 1.5519, while an open below 1.5441 may find Support at 1.5411 and 1.5363.

Japanese Yen (JYU8):

The JY opened lower at .9293 and rallied to a morning Hi of .9317, as carry-traders covered JY 'shorts' after the equity markets reversed in Europe after the Nikkei 225 was up 100+ points. Prices slid to a mid-day Lo of .9297, before rebounding on DX weakness to a daily Hi of .9330. The JY drifted into the close of .9317, up 10 tics. The s/t trend remains 'negative' w/ weak momentum indicators. More downside ahead as long as the yield-gap abroad is attractive. A higher open should find Resistance at .9342 and .9367, while an open below .9305 may find Support at .9280 and .9243.