Dollar Index (DXU8):
The DX opened lower at 76.83 after continued 'hawkish' comments from ECB voting member Alex Weber. Prices rose to our Pivot level of 77.10 after a better than expected Q2 GDP of +3.3% and a decline in Jobless Claims of 10K. As oil prices rose above $120.00 the DX slid to a morning Lo of 76.70, before rebounding to a morning Hi of 77.22 as oil prices retraced below $117.00. Lower oil prices and higher equity prices helped the DX climb to our initial Resistance level of 77.41 as we head towards the close. Prices drifted lower into the close and ended the session at 77.25, up 6 tics. The s/t trend remains 'positive' w/topping momentum indicators. Longs should tighten 'stops' or buy 'puts' to reduce exposure on last trading day of the month ahead of a Holiday weekend. A higher open should find Resistance at 77.54 and 77.83, while an open below 77.12 may find Support at 76.83 and 76.41.
British Pound (BPU8):
The BP opened higher at 1.8331 on DX weakness and rose to a morning Hi of 1.8367, before weaker housing data and slowing Retail Sales sent prices to a morning Lo at our initial Support level of 1.8220. Buyers were on the sidelines as the DX continued higher, leaving prices in a thin trading zone at our Support level before ending the day at 1.8266, down 35 tics. The s/t trend remains 'negative' w/ over-sold momentum indicators. Weaker 'economic reports' merit a rate cut, which should weigh on prices. Weak 'shorts' may take profit/risk off the table and bump prices higher ahead of the weekend. A lower open may find Support at 1.8196 and 1.8127, while an open above 1.8290 should find Resistance at 1.8359 and 1.8453.
Canadian Dollar (CDU8):
The CD opened higher at .9551 and rose to a morning Hi at our initial Resistance level of .9576, before a bounce in the DX and lower oil prices sent the CD to a morning Lo of .9493. Prices bounced to our initial Support level of .9513, before sliding to our secondary Support level of .9485 as we move towards the close. A bounce to our initial Support level of .9513 ended the rebound and closed the day at .9506, down 33 tics. The s/t trend remains 'positive' w/neutral momentum indicators. Keep an eye on Tropical Storm Gustov as it heads towards the Gulf of Mexico and picks up intensity. Higher oil should push the CD higher. A lower open may find Support at .9466 and .9427, while an open above .9525 should find Resistance at .9564 and .9623.
Euro Currency (ECU8):
The EC opened higher at 1.4755 as more 'jawboning' by ECB member Alex Weber sent prices to a morning Hi of 1.4800. Stronger U.S. economic data sent prices to a morning Lo at our Pivot level of 1.4694, before bouncing into the afternoon session. The DX continued higher as oil prices fell to $114.08, sending the EC to an afternoon Lo of 1.4660. Prices rose into the close to end the session at 1.4689, down 6 tics. The s/t trend remains 'negative' w/weak momentum indicators. The DX should dictate direction, however, short-covering rallies have not shaken the stronger 'shorts' out of positions. We could see some profit/risk taken off for end-of-month 'book squaring'. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. A lower open may find Support at 1.4633 and 1.4576, while an open above 1.4716 should find Resistance at 1.4773 and 1.4856.
Japanese Yen (JYU8):
The JY opened higher at .9157 and slid to a morning Lo of .9137 on the DX rebound. Prices bounced to a morning Hi of .9200, before sliding to our Pivot level of .9150 as we approach the afternoon session. The JY followed most other major foreign currencies lower as the DX continued higher, sending the JY to an afternoon Lo of .9121 heading towards the close. Prices tested our Pivot level of .9151, before drifting lower to a close of .9134, up 4 tics.The s/t trend remains 'negative' w/ neutral momentum indicators. A lower open may find Support at .9103 and .9073, while an open above .9152 should find Resistance at .9182 and .9231.
