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DOLLAR: The Dollar has managed another new low for the move overnight and that would seem to suggest that the trade remains mostly up beat toward the economic outlook. In fact, some Press sources overnight actually declared an end to the recession and that mentality seems to be applying fresh liquidation pressure to the Dollar. With the US scheduled to float a private Home price survey reading early this morning and that news to be followed by a US Consumer Confidence reading, the trade should have plenty of information to push the Dollar down toward the 78.00 level. However, as in the equity markets the trade is fully embracing the recovery view and data against that view could quickly pull the September Dollar Index back to the recent consolidation highs up around the 79.25 level. In short, we think the bear camp retains the edge but that the Greenback will have to see a clean sweep of at, or better than expectations type data points to extend on the downside. In other words, the bear camp is now spoiled and it will probably require every data point to extend on the downside.

EURO: While the Euro has managed a fresh new high for the move overnight, we get the sense that the Euro is starting to lose some upside momentum. However, the Euro will continue to turn more off US data points, than Euro zone data and for the time being, it seems as if the trade will continue to look for more risk outside of the Dollar. Up trend channel support in the September Euro is 141.85 today and as long as the US scheduled data is not patently upsetting, the odds of more new highs for the move in the Euro look to be good. However, it would not be a favorable sign to see the September Euro fail to hold above an even more critical pivot point at 141.56 this morning.

YEN: While the Dollar looks to remain weak and that could weigh on the Yen, the September Yen seems to have found a measure of support at the 105 level. Perhaps the Yen trade is speculating on some form of impending bottom in the Dollar in the wake of the string of potentially critical events today. There would seem to be little in the way of resistance on the Yen charts until the 106.20 level in the September Yen. Pushed into the market we would favor a quick look at the long side of the Yen.

SWISS: The Swiss continues to have a mostly bullish setup on the charts and we suspect that the trade will attempt to extend the upside push early in the trade today. However, an extending consolidation pattern just under the 94.00 level is starting to give off the impression of lost momentum. In our opinion being long the Swiss at current levels is like being long the stock market at the recent highs. In conclusion, the Swiss needs almost a clean sweep of up beat economic information today to extend and perhaps simply maintain current levels. Aggressive traders might sell a move above 94.00, using a risk at 94.28.

POUND: The bull camp will suggest that the Pound has maintained an up trend pattern on the charts. We would suggest that the Pound has lost momentum and that the 165.85 level has become some type of recovery/no recovery pricing zone. Like the Euro, Swiss and equity markets, the bull camp in the Pound is fully embracing the recovery view and to see another upside breakout in the Pound probably requires a definitively supportive flow of US information today. We would suggest that traders go with a breakout of 165.50 and 164.30, but we favor selling strength in the Pound directly ahead.

CANADIAN DOLLAR: The Canadian continues to claw its way higher on the charts and to a degree we think that the Canadian deserves the rise because of classic fundamental developments. In fact, unless the equity markets come under noted and sustained pressure and or the US data flow is somehow discouraging, we suspect that the Canadian is going to continue to favor the upside. Solid support is seen at even numbers of 92.00.


This content originated from – The Hightower Report.
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