Dollar Index (DXM9):
The Dollar Index opened 'flat' at 84.55 and moved higher as equity markets retreated. Comments from Clayton Securities analyst Mike Mayo, stating that losses in U.S. banks will exceed losses from the 'Great Depression' sent bank and financial stocks lower, sending investors to the 'safe-haven' of Treasuries and the DX. Prices rose to a mid-day level of 85.265, before trailing lower towards the close, ending the session at 85.075, up 52 tics. The s/t trend remains 'negative' w/neutral momentum indicators. Traders will look for 'conviction' from overseas equity markets as the fall-out from Mayo's comments are digested and earnings reporting begins. A higher open should find Resistance at 85.53 and 85.98, while an open below 84.81 may find Support at 84.36 and 83.65.
Euro Currency (ECM9):
The EC opened higher at 1.3495, before pressure from a stronger DX and weaker equities sent prices to a morning Lo of 1.3356, before finding support and bouncing higher into the afternoon session. Prices consolidated at our initial Support level of 1.3402, before ending the session at 1.3397, down 91 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Lower equity markets may weigh on prices. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at 1.3308 and 1.3219, while an open above 1.3445 should find Resistance at 1.3534 and 1.3671.
Canadian Dollar (CDM9):
The CD opened lower at .8107 and followed oil/metal prices lower. Concerns that the BoC will join the U.S. in its quest to add liquidity to the banking system by 'quantitative easing', also weighed on prices. The CD fell to .8041, before bouncing higher towards the close and ending the session at .8065, down 70 tics. The s/t trend remains 'positive' w/ firm momentum indicators. Key on equity prices to move energy markets and the DX. Longs should tighten 'stops' or buy 'puts' to reduce exposure. A lower open may find Support at .8009 and .7954, while an open above .8097 should find Resistance at .8152 and .8240.
