British Pound (BPM9):

Sterling opened lower at 1.4569 after the Debt Management Office said it was unable to attract enough investors for the 1.75 billion pounds ($2.55 billion) of the 40 year securties. Prices bounced to a morning Hi of 1.4735 as the DX retraced on stronger economic data. Prices continued lower into the afternoon and ended the day-session at 1.4531, down 195 tics. The s/t trend remains 'positive' w/ turning momentum indicators. The 'failed' auction sends a negative message to PM Brown, that the government should be cautios about spending and deficits. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.4450 and 1.4368, while an open above 1.4597 should find Resistance at 1.4697 and 1.4826.

Dollar Index (DXM9):

The DX opened higher at 84.57 and rose to a morning Hi of 84.79, before a better than expected New Home Sales report showed an increase of +4.7%, which added to the better Durable Goods report helped equity markets rise. Traders left the safe-haven of the DX to take on more risk, sending prices to a morning Lo of 83.65. As equity prices retraced, the DX bounced into the afternoon session and traded around our Pivot level of 84.27 through to the day-session close of 84.30, down 3 tics. The s/t trend remains 'negative' w/ weak momentum indicators. Remarks from Treasury Secretary Geithner considering a 'new' global reserve currency may have weighed on prices. A higher open should find Resistance at 84.87 and 85.44, while an open below 84.26 may find Support at 83.69 and 83.08.

Euro Currency (ECM9):

The EC opened lower at 1.3486 and rose against the weaker Sterling to a morning Hi at our initial Resistance level of 1.3655. As the DX rebounded, the EC followed equity prices lower, before finding Support at our Pivot level of 1.3542. Prices bounced higher towards the close to end the day-session at 1.3566, up 47 tics. The s/t trend remains 'positive' w/ expensive momentum indicators. Comments about consideration for a new global reserve currency weighed on the Dollar and benefited the EC. A higher open should find Resistance at 1.3675 and 1.3783, while an open below 1.3546 may find Support at 1.3438 and 1.3309.