British Pound (BPZ8):
The BP opened lower at 1.5203 after BoE Governor King stated that they will do whatever it takes to relieve recissionary pressure, inferring further rate cuts are likely. Prices continued lower against the stronger DX, sliding to 1.4875, before bouncing into the afternoon session and retracing to the morning lows as we head into the close. Prices rose as s/t traders covered 'shorts', sending prices to a close of 1.4946, down 449 tics. The s/t trend remains 'negative' w/ over-sold momentum indicators. Higher unemployment, increasing jobless claims and the lowest level of home sales in the last 30 years continue to weigh on the economy. A lower open may find Support at 1.4727 and 1.4508, while an open above 1.5094 should find Resistance at 1.5313 and 1.5680.
Dollar Index (DXZ8):
The DX opened higher at 87.86 as trader sought a 'flight to quality' as traders expect a possible run on Russian Banks and comments from the ECB and BoE that further rate cuts are likely. Prices rose to 88.22 and drifted lower as we begin the afternoon session. The DX was bid higher as we headed into the close to end the session at 88.05, up 36 tics. The s/t trend remains 'positive' w/expensive momentum indicators. With deeper rate cuts likely to come in most major foreign central banks, the DX could challenge the Target Hi of 88.49 on 10/28. Flight to quality continues to favor the 'green-back'. A higher open should find Resistance at 88.44 and 88.83, while an open below 87.82 may find Support at 87.43 and 86.81.
Canadian Dollar (CDZ8):
The CD opened lower at .8236 and slid lower against the stronger DX and weaker energy/metal markets. Prices drifted to a morning Lo of .8081, before bouncing into the afternoon session. The stronger DX continued to weigh on oil and metal prices, keeping buyers of CD on the sidelines through to the close of .8080, down 209 tics. The global slowdown and weaker commodities continue to weigh on prices. Tech's will note the close at the 61.8% Fib Ret level and use that as a key for Thursday's trading. Shorts should tighten 'stops' or buy 'calls' to reduce exposure at the key Fib Ret level. A lower open may find Support at .7986 and .7893, while an open above .8162 should find Resistance at .8255 and .8431.
Euro Currency (ECZ8):
The EC opened lower at 1.2509 and slid to 1.2446 against the stronger DX after Tuesday's dovish comments from ECB President Trichet stating that further rate cuts are likely. Prices bounced to 1.2506 as we begin the afternoon session, but drifted lower towards the close, ending the session at 1.2489, down 43 tics. The s/t trend remains 'negative' w/ weak momentum indicators. With lower interest rates ahead, traders will look for a re-test of the Target Lo of 10/28 at 1.2326. A lower open may find Support at 1.2420 and 1.2351, while an open above 1.2515 should find Resistance at 1.2584 and 1.2679.
Japanese Yen (JYZ8):
The JY opened higher at 1.0297 and continued to rise to a mid-day Hi of 1.0593 as risk-aversion saw carry-trades unwind, leading to a short-covering rally. Prices drifted lower into the afternoon session, before bouncing to an afternoon HI of 1.0514 and sliding towards the close as s/t traders took profit/risk off the table, sending prices to a close of 1.0472, up 235 tics. The s/t trend remains 'positive' w/ firm momentum indicators. As long as risk-aversion continues, carry-traders will continue to 'cover' short JY positions. Key on the Nikkei 225 for continued weakness, which should push the JY higher. A higher open should find Resistance at 1.0643 and 1.0813, while an open below 1.0422 my find Support at 1.0252 and 1.0031.
