Euro Currency (ECU8):

The EC opened lower at 1.4433 against the stronger DX as a weaker than expected drop in Retail Sales of -0.4% and a contraction in the composite PMI continued to weigh on  prices. The DX came off its morning Hi and lifted the EC to a mid-day level of 1.4492 as we head into the afternoon session. Prices rose into the close, hitting 1.4495, before ending the day at 1.4481, down 23 tics. The s/t trend remains 'negative' w/over-sold momentum indicators. Short-covering could continue after the ECB rate decision, when bank President Trichet reads the 'statement' and traders rate it for degrees of 'hawkish' or 'dovish' points. Keeping rates 'unchanged' w/ 'hawkish' commentary could send prices higher, while mentioning a need for a rate cut should see the downtrend continue. A higher open should find Resistance at 1.4545 and 1.4610, while an open below 1.4460 may find Support at 1.4395 and 1.4310.

Dollar Index (DXU8):

The DX opened higher at 78.55, before sliding to a morning Lo of 78.24 as a short-covering rally in Gold sent commodity currencies higher. Higher oil prices and lower equities sent the DX to a mid-day Lo at our Pivot level of 78.10, before bouncing into the afternoon session. Prices rose to 78.285, before higher oil prices sent the DX to a close of 78.16, up 2 tics. The s/t trend remains 'positive' w/ over-bot momentum indicators. Lower oil prices and falling commodity prices have helped the DX, while fears of a global slow-down and recession continue to weigh on most major currency markets. Longs should tighten 'stops' or buy 'puts' to reduce exposure ahead of Friday's Payroll Report. A lower open may find Support at 77.92 and 77.68, while an open above 78.32 should find Resistance at 78.56 and 78.97.  

British Pound (BPU8):

The BP opened lower at 1.7756 and dipped to 1.7716, before bouncing to 1.7804. A weak Consumer Confidence report and struggling economy will have to endure 5.0% interest rates to combat the growing inflation. The MPC rate meeting Thursday should leave rates 'unchanged', according to BOE Governor King. Prices drifted lower into the afternoon session as 'shorts' continue to look for weaker prices going into the rate meeting. The weaker DX sent prices to 1.7756, before dipping to a close of 1.7740, down 66 tics. The s/t trend remains 'negative' w/ over-sold momentum indicators. Thursday's MPC meeting should see rated left 'unchanged' at 5.0%. Unless the BoE can fend off a possible 'recession' w/ creative lending to help out the housing sector, prices could test the monthly lows of 1.7050 of 11/05. Traders will key on the DX ahead of Friday's Payroll Report to look for 'chinks' in the armor to take some profit/risk off the table. Shorts should tighten 'stops' or buy 'calls' to reduce exposure. A higher open should fnd Resistance at 1.7827 and 1.7915, while an open below 1.7739 may find Support at 1.7651 and 1.7563. 

Canadian Dollar (CDU8):

The CD opened lower at .9328 as lower oil/metals prices and stronger DX continued to weigh on most major foreign currency markets. The BoC left short-term interest rates 'unchanged' at 3.0% and stated that the nation is "still close to the economy's production capacity". Prices rebounded after the statement to a morning Hi of .9453, before drifting lower towards the afternoon session. Traders continue to key on oil prices as they swing within a volatile $3.00 trading range. As oil prices moved higher the CD rose to .9424, before closing at .9422, up 64 tics. The s/t trend remains 'negative' w/weak momentum indicators. The less than 'dovish' tones out of the BoC could lead to further short-covering, provided it gets the help of higher oil/metals prices. A higher open should find Resistance at .9491 and .9561, while an open below .9348 may find Support at .9314 and .9207.

Japanese Yen (JYU8):

The JY opened higher at .9220 and slid to .9205, before bouncing to .9240 on residual 'short-covering' by carrytraders and repatriation of funds invested in the Aussie and Kiwi. As the DX retraced, the JY rose to a mid-day Hi of .9261, before drifting back to our Pivot level of .9225 as we move towards the close. The JY rose into the close and ended the session art .9248, up 36 tics. The s/t trend remains 'positive' w/ firm momentum indicators. The 'technical' short-covering rally should not be misconstrued as anything but that. The economy continues to weaken and spec's should use 'caution'. A higher open should find Resistance at .9282 and .9316, while an open below .9227 may find Support at .9193 and .9138.