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Currencies: Without Help, Dollar May Have Trouble Trading Above Recent Levels

by Dave Hightower on August 24, 2011

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DOLLAR: The Dollar has given back overnight gains and has come under pressure this morning, with prices staying well within the recent trading range. With few major US economic numbers early on this week, the focus on Fed Chairman Bernanke’s Jackson Hole speech on Friday has kept Dollar strength limited at best. Yesterday’s record low 2-year auction yield may be an indication of the market’s lack of confidence in US prospects, although a positively received Durable Goods number later this morning could help to put a floor under prices. While overseas risk concerns could provide support if there is a flare-up later today, a more likely scenario is that the Dollar remains on the defensive for the balance of today’s session. The Dollar may find support near the 73.65 level during today’s trading, and will need a major turnaround in sentiment in order to lift well clear of these low price levels.

EURO: The Sept Euro has been able to overcome a weak private survey of German business sentiment and posted moderate gains this morning. While Euro zone debt concerns have not been fully resolved, a lack of fresh negative headlines may be doing more to strengthen the Sept Euro than any tangible improvement with economic conditions. The market remains vulnerable to a pullback if problems do materialize, however, so today’s upside may remain limited until calmer market conditions prevail. The Sept Euro may find resistance near the 144.75 level, and may need to see improved global sentiment in order to rally beyond these current price levels.

YEN: The September Yen recovered from overnight pressure and has posted moderate gains coming into this morning’s session. Today’s credit rating downgrade for Japan may not have come as a total shock to the market given their current economic and political conditions but the Sept Yen’s ability to recover from that news is a strong indication of the amount of safe haven support that is still in the market. The Sept Yen may find resistance around the 130.80 level, but it could see further gains if global risk concerns become a factor again during today’s trading.

SWISS: The Sept Swiss has also found support within the past few hours and lifted back into positive territory, with prices holding well within the recent trading range. There has been some modest flight to quality support this morning, although recent strength has been limited by the Swiss National Bank’s efforts to weaken their currency. The Sept Swiss may find resistance around the 127.00 level during the session, and would likely need a fresh risk headline out of the Euro zone in order to rise above this recent trading range.

POUND: The Sept Pound has held near the upper end of this month’s rally, although a lack of recent UK economic data has kept the market subdued so far this week. Improved global economic sentiment will likely be to the Sept Pound’s benefit, even with prospects for near-term UK rate hikes staying remote at best. The Sept Pound may find resistance near the 165.35 level and could produce further gains if equity markets on both sides of the Atlantic have a strong rally.

CANADIAN DOLLAR: The Sept Canadian appears to be consolidating within the recent trading range, finding little carryover support from energy and precious metals prices. With this week’s Canadian economic slate fairly quiet, prices may have some difficulty rising above these recent levels. The Sept Canadian may find support near the 100.80 level, and could come under additional pressure if there is a broad-based commodity sell off later in today’s session.

TODAY’S MARKET IDEAS: The Dollar may have trouble rising above these recent price levels until Fed Chairman Bernanke’s Jackson Hole speech is out of the way. It could rise into positive territory if today’s Durable Goods numbers can exceed market expectations. Both the Sept Pound and Sept Canadian would benefit from stronger equity markets on both sides of the Atlantic.

Currencies: More Gains in Dollar Will Require US Equity Market Strength

by Dave Hightower on August 8, 2011

DOLLAR: The Dollar has been weak this morning but has risen well above the evening lows, in what has been another turbulent overnight session. Friday’s US debt downgrade by S&P may be pressuring US equity markets, but the strength of Treasury futures may be providing some measure of support for the Dollar. In addition, a turnaround in Europe after early optimism could lift the Dollar up into positive territory later on today. The most recent Commitment of Traders reports showed that non-Commercial traders reduced their net-long Dollar position as of last Tuesday, before prices made a large upside surge late last week. It will be difficult for the Dollar to get past severe losses in US equity markets today, but this morning’s shift in risk concern back across the Atlantic may help to keep prices well away from the recent lows. The Dollar may find support near the 74.50 level during today’s session but prices will continue to have a bumpy ride until the close. The Commitments of Traders Futures and Options report as of August 2nd for US Dollar showed Non-Commercial traders were net long 627 contracts, a decrease of 1,976 contracts. The Commercial traders were net short 3,342 contracts, a decrease of 1,683 contracts. The Non-reportable traders were net long 2,715 contracts, an increase of 293 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 3,342 contracts. This represents a decrease of 1,683 contracts in the net long position held by these traders.

EURO: The Sept Euro gave back substantial gains during the past few hours, and has dropped back towards unchanged levels this morning. An agreement to have the ECB buy Spanish and Italian debt was well received by the market early in the overnight session, but this optimism could not be sustained for long. The most recent Commitment of Traders report indicated non Commercial traders had a substantial reduction in their net-long Euro position as of last Tuesday, a period when the market was descending towards the recent lows. Given how far the Sept Euro has pulled back from overnight highs, there may be further downside left to this sell off unless EU officials can further calm the markets. The Sept Euro may find support near the 142.25 level, and may need some help in order to ease this morning’s pressure. The Commitments of Traders Futures and Options report as of August 2nd for Euro showed Non-Commercial traders were net long 979 contracts, a decrease of 15,462 contracts. The Commercial traders were net short 4,039 contracts, a decrease of 17,299 contracts. The Non-reportable traders were net long 3,061 contracts, a decrease of 1,836 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 4,040 contracts. This represents a decrease of 17,298 contracts in the net long position held by these traders.

YEN: The September Yen posted sharp gains during overnight trading, and is close to fully recovering from last week’s central bank intervention. While 4.5 trillion Yen down the drain may be painful for the Bank of Japan to swallow, the current flight to quality tilt may have been difficult to overcome given the pressure on global equity markets. Further intervention is by no means off the table, as the weekend G7 statement may hint at concerted action during the near future. The September Yen may find resistance near the 129.25 level today, and is likely to hold onto these large gains until global equity markets can put the brakes on this current meltdown.

SWISS: The Sept Swiss made another new record high during overnight trading and continues to post solid gains in spite of a substantial pullback from new high ground. As long as global equity markets remains under pressure during today’s session, the Sept Swiss will remain fairly close to these fresh highs. The Swiss National Bank may be closer to intervention now that last week’s rate cut had little lasting effect, but they may not step into the market until safe-haven support has eased somewhat. The Sept Swiss may find resistance near the 132.00 level later on today, and will remain well supported as long as global equity markets are heading to the downside.

POUND: The Sept Pound fell back from a 2-month high during the overnight session but has held onto moderate gains this morning. While overnight strength may have due in large part to carryover support from Euro zone debt support of Italy and Spain, the Sept Pound could be more likely to hold onto this morning’s gains. The Sept Pound may retest resistance near the 164.20 level this morning, and could see a further recovery if global equity markets can find a bottom.

CANADIAN DOLLAR: The Sept Canadian remains on the defensive this morning, and has fallen nearly 5 cents before last month’s highs. While recent Canadian economic data has been comparatively strong, a $16 decline in crude oil prices since July 26th has been difficult to overcome. The Sept Canadian may find support near the 101.00 level, and will likely need a turnaround in the energy markets in order to rebound from these current prices levels.

TODAY’S MARKET IDEAS: While the Dollar has been able to make a large recovery from overnight lows, further gains from these price levels will require some strength from US equity markets. If equity markets both sides of the Atlantic call mount a recovery later on this morning, both the Sept Yen and Sept Swiss could see a substantial pullback from current prices levels.

Currencies: Dollar Needs Positive US Numbers; Canadian Likely To New Highs

by Dave Hightower on July 26, 2011

DOLLAR: The Dollar continues to fall sharply this morning, reaching the lowest price levels since early May. Last night’s speeches by President Obama and Speaker Boehner were not well received by the markets, and have reinforced this week’s negative Dollar tone. This morning’s US data could provide some limited support to the Dollar if the numbers exceed market expectations. Unless there are some signs of progress towards a debt ceiling agreement, the Dollar is likely to remain on the defensive during today’s session. The Dollar may retest support near the 73.70 level later this morning, and could easily make a new low for 2011 if the situation in Washington continues to deteriorate.

EURO: The Sept Euro was able to make a strong move to the upside, easily reaching 3-week highs during overnight trading. Lukewarm private surveys of German and French consumer sentiment have taken some steam out of this rally but the market’s focus on US problems is likely to keep the Sept Euro well supported at these levels. A fresh flare-up of Euro zone debt concerns may cause some problems for the Sept Euro, however, as there are concerns that last week’s aid package for Greece may not be the last time help is needed for an EU nation that subject is far from completed. The Sept Euro may find resistance around the 144.80 level, and is likely to hold onto these gains as long as US debt problems dominate the news headlines.

YEN: The September Yen has gone through an extremely volatile overnight session but has held onto moderate gains this morning. Statements expressing “official” concern with recent Yen strength may be an early sign that the Japanese are getting ready for intervention, whether on their own or with concerted action involving other central banks. The September Yen may find resistance again near the 128.50 level but recent safe-haven support may not be enough to support prices if central banks start selling.

SWISS: The Sept Swiss continues to post new record highs, with market concern over the US debt situation providing plenty of flight to quality support. If there are some positive signs of progress towards a US debt ceiling agreement, the Sept Swiss could lose a significant portion of these recent gains. The Sept Swiss may find resistance again near the 125.00 level this morning, and may find new high ground once again, if there are few signs of progress from Washington.

POUND: The Sept Pound was able to overcome a sluggish UK GDP number this morning to post a new high for the current up move. While recent data may have pushed a Bank of England rate hike into 2012, UK austerity measures over the past year may be paying off now when contrasted with the gridlock on this side of the Atlantic. The Sept Pound may find resistance near the 164.00 level, and may gain further ground if US markets remain under pressure.

CANADIAN DOLLAR: The Sept Canadian posted a new high for the move during the overnight session, and remains fairly strong going into this morning. A rebound in commodity markets today is likely to provide some support, especially if crude oil makes a strong move above the $100 level. The Sept Canadian may find resistance near the 106.00 level, and may rise to another new high for this move if negative sentiment from the US does not weigh down the market.

TODAY’S MARKET IDEAS: The Dollar is likely to remain on the defensive this morning as long as US debt problems dominate the news headlines. Positively received US data later this morning could help the Dollar to recover some overnight losses. The Sept Canadian is likely to reach new high ground again as long as commodity prices maintain today’s rebound.

FOREX: Euro Vulnerable to Negative Sovereign Debt News

by Dave Hightower on July 14, 2011

DOLLAR: The Dollar has made a large recovery from overnight lows but remains in negative territory in what has already been a turbulent session so far. With Fed Chairman Bernanke putting the Dollar on the defensive with hints of new quantitative easing, a credit rating agency warning for the US if the debt ceiling is not increased added further pressure to the market. A huge reversal during Asian trading provided some strength to the Dollar, but sentiment remains weak coming into this morning. Today’s US data may provide some support if the numbers exceed expectations, but the market may focus on Fed Chairman Bernanke’s Senate testimony to find further clarity on the potential for upcoming quantitative easing. The Dollar may find support near the 75.15 level this morning, and may need the market’s focus to shift back towards overseas problems in order to put together any extended recovery.

EURO: The Sept Euro was able to extend yesterday’s recovery but has fallen well back of the overnight highs this morning. Chairman Bernanke’s testimony and the US credit rating warning took the market’s attention away from a still problematic sovereign debt situation for the Euro zone. Today’s Italian debt auction had the highest 15-year yields on record, indicating there is still a large concern with contagion of this debt crisis. With one credit rating agency giving Greece the lowest debt rating in the world, there is still a large chance of this week’s rebound reversing to the downside. The Sept Euro may find resistance near the 141.90 level but needs some positive news on the sovereign debt front to hold onto these recent gains.

YEN: The September Yen posted a massive overnight range, and has traded back toward unchanged levels coming into this morning. Flight to quality out of the US and the Euro zone drove the market up to 4-month highs, but a huge selloff in Asian trading sent the market into a nosedive. There has been no official confirmation of intervention last night but the Bank of Japan may be ready at any time to sell the Yen at these current levels. The Sept Yen may find support near the 126.40 level, and may be vulnerable to further losses if central banks start to intervene against the Yen.

SWISS: The Sept Swiss built on yesterday’s huge gains with a large overnight rally, moving well beyond the previous record highs. Safe haven support from the Euro zone and the US clearly has been the main supportive factor for this rally, but a sizable pullback from the overnight highs may be a sign that this week’s upmove may have lost momentum. Swiss National Bank officials were already hinting at intervention when the Sept Swiss was below 121.00, so potential longs should be cautious now that market is far above that area. The Sept Swiss may find support near 122.40, and may need an additional risk flare-up in order to retest today’s new record high.

POUND: The Sept Pound made a 3-week high early in today’s session but is sliding back towards unchanged levels. Sluggish UK economic data has undermined the case for Bank of England rate hikes, so prices may be vulnerable to a sharp selloff if Euro zone debt problems regain the market’s focus. The Sept Pound may find support near the 160.80 level, and will need positive UK economic news in order to climb back towards the overnight highs.

CANADIAN DOLLAR: The Sept Canadian was able to post a new 2-month high today, but lukewarm commodity markets have weakened this current recovery rally. With few major Canadian economic numbers until next week, the Sept Canadian may have to depend on the strength of crude oil and gold to hold onto these recent gains. The Sept Canadian may find support near the 103.85 level this morning, and may need a broad-based commodity rally in order to post a new high again today.

TODAY’S MARKET IDEAS: The Dollar will start out this morning in negative territory but a huge recovery from overnight lows could gain momentum if today’s US numbers are positively received by the market. The Sept Euro could see a sharp decline if there are any negative headlines on their sovereign debt crisis during the session.

Currencies: Needs Good US Numbers to Hold Recent Gains

by Dave Hightower on July 5, 2011

DOLLAR: While the Dollar has shown some strength this morning, prices have only recovered a small portion of last week’s losses. There has been some safe-haven support from news that Chinese banks have understated loans to local governments, but inconsistent US data over the past few weeks may be keeping Dollar gains in check. There will be few US economic numbers in front of Friday’s Payroll data, so the Dollar is likely to take some direction from overseas risk concerns. The most recent Commitment of Traders report indicated that non-Commercial traders had more than doubled their net-long Dollar position as of last Tuesday, which was during a sharp pullback from the recent highs. The Dollar may find resistance around the 74.95 level this morning but should hold enough support to remain well above the recent lows. The Commitments of Traders Futures and Options report as of June 28th for US Dollar showed Non-Commercial traders were net long 12,971 contracts, an increase of 7,852 contracts. The Commercial traders were net short 17,827 contracts, an increase of 8,130 contracts. The Non-reportable traders were net long 4,857 contracts, an increase of 279 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 17,828 contracts. This represents an increase of 8,131 contracts in the net long position held by these traders.

EURO: The Sept Euro fell back from overnight highs, coming under pressure from a weak Euro zone Retail Sales number this morning. With the Greek debt situation becoming less of a market factor, the Sept Euro may take more direction from economic conditions in the “core” Euro zone nations. Last week’s sluggish sentiment numbers may be an early warning sign that upcoming Euro zone data may fall short of expectations. The Sept Euro may find support near the 144.25 level during today’s session, and could fall further to the downside if there is a sudden risk flare-up out of the Greek debt situation. The Commitments of Traders Futures and Options report as of June 28th for Euro showed Non-Commercial traders were net long 34,756 contracts, an increase of 2,911 contracts. The Commercial traders were net short 43,435 contracts, an increase of 2,551 contracts. The Non-reportable traders were net long 8,679 contracts, a decrease of 361 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 43,435 contracts. This represents an increase of 2,550 contracts in the net long position held by these traders.

YEN: The September Yen extended Friday’s sell off into this week, and is now closing in on a one month low this morning. The resignation of a key minister in the Japanese government has added pressure on the September Yen, which may find little benefit from an economy still recovering from the effects of the Sendai earthquake this spring. The September Yen may find support near the 123.10 level, with the potential for a downside breakout seen if that price area does not hold.

SWISS: The Sept Swiss was able to post a strong recovery from last week’s sell off but prices remain far below record high levels. There has been some safe-haven support from today’s poor Euro zone data, but the Sept Swiss may need further EU debt problems in order to reach new high ground again. The Sept Swiss may find resistance just above the 119.00 level today, and could see further gains if there are fresh headlines from the Greek debt situation.

POUND: The Sept Pound has been strengthened by a surprise jump in a private UK services survey this morning and it has climbed to the highest price levels since June 22nd. While today’s number may be in contrast to recent sluggish UK data, further strong economic numbers may be needed to persuade the Bank of England to hike rates during the near future. The Sept Pound may find resistance near the 161.25 level again this morning, but gains may be capped until there is further evidence of UK economic recovery.

CANADIAN DOLLAR: The Sept Canadian has been unable to take advantage of strong crude oil and gold prices this morning, and has drifted away from Friday’s highs. Even so, the Sept Canadian’s huge recovery from 3-month lows should help to keep prices well supported at these levels. The Sept Canadian may find support near the 103.50 area but could see a retest of last week’s highs if there is further broad-based strength for commodities during today’s session.

TODAY’S MARKET IDEAS: The Dollar should start out this week with moderate strength, and will need today’s US data to avoid a negative surprise in order to maintain these gains. The Sept Canadian could retest last week’s highs for the move if there is a strong rally in energy markets later today.

Currencies: Dollar on Defensive but Waiting On Numbers

by Dave Hightower on June 17, 2011

DOLLAR: The Dollar has seen a sizable pullback this morning, but remains close to the upper end of this recent recovery rally. Unless there is a larger change with sentiment over the next few hours, the Dollar could finish with a reasonably strong gain for the second consecutive week. Sluggish US data remains a concern, but there have been several economic numbers during the past few days that have provided some cause for optimism. The focus of the market remains on overseas risk concerns, so any positive news out of the Euro zone could put additional heavy pressure on the Dollar relatively quickly. Today’s US numbers could add further volatility into the mix if they surprise the market. The Dollar may find support near the 75.70 level, but may finish out the week holding relatively close to the highs for this recent rally.

EURO: The Sept Euro was able to lift well clear of the recent lows, although prices have a long way to go in order to recover losses sustained over the past few sessions. A cabinet reshuffle by the Greek government, including the idea of having an opposition leader as Finance Minister, has been positively received by the market but may only last until the passage of austerity measures needed to receive aid from the IMF and EU. Elevated risk concerns are still going to be a major problem for the Sept Euro to contend with during the next few weeks, and any further debt problems for the Euro zone could send prices back down towards the lows for the move. The Sept Euro may test resistance around the 142.40 level later on this morning, but needs to receive some positive news on Euro zone debt in order to make any substantial recovery from these levels.

YEN: The September Yen continues to make a late-week recovery, but prices have only risen back towards the middle of this week’s trading range. While today’s Dollar pullback is likely to give the September Yen some additional strength this morning, the upside may be limited as prices approach the critical 125.00 level where possible central bank intervention starts to become an issue. The September Yen may find resistance around the 124.75 level, and may not have enough upward momentum to retest last week’s highs.

SWISS: The Sept Swiss has recovered from this week’s lows, but remains well below record high levels posted earlier in the month. Recent safe-haven support may have been eroded by today’s events in the Euro zone, but the Sept Swiss is likely to stay fairly well supported until the crisis has reached some sort of conclusion. The Sept Swiss may find resistance near the 118.50 level but will likely need fresh risk concerns in order to trade up towards the recent highs.

POUND: The Sept Pound was able to put together a modest recovery this morning, but will likely finish a choppy and volatile trading week close to the recent lows. Weak UK economic data has taken a near-term Bank of England rate hike off the table for now, but an end-of-week Dollar sell off could help the Sept Pound to recover a portion of recent losses. The Sept Pound may find resistance near the 161.80 level, but needs a vast change in sentiment in order to climb back towards this week’s highs.

CANADIAN DOLLAR: The Sept Canadian has climbed back towards the middle of a huge weekly trading range, but gains have been limited by sluggish market action in crude oil and gold this morning. Comparatively strong Canadian economic data has taken a back seat to generally weak energy and precious metals prices which in turn have been providing the Sept Canadian with it recent direction. The Sept Canadian may find resistance around the 102.00 area later on this morning, but it needs a broad-based commodity rally in order to move well beyond these levels.

TODAY’S MARKET IDEAS: The Dollar appears to be concluding this week’s trading on the defensive, but may find some support if today’s US data comes in better than the market expects. The Sept Euro has been able to post a strong recovery this morning, but today’s rebound could quickly turn around if there is further negative sovereign debt news out of the Euro zone.

Currencies: Dollar’s Direction Determined By Reaction to US Jobs Data

by Dave Hightower on June 3, 2011

DOLLAR: The Dollar has been able to stabilize near unchanged levels, but remains down near the bottom end of the recent sell off. This week’s choppy and two-sided trading has calmed down in anticipation of today’s US jobs data, but the Dollar has been unable to totally shake off the impact of a credit rating agency warning for a potential downgrade if the debt level increase is not approved. A continued series of weak US economic numbers has put even more focus than normal on today’s US employment numbers, particularly with payroll numbers being adjusted down after private job surveys came in much lower that expected this week. Strong US data may provide enough strength for the Dollar to make a quick return towards this week’s highs, but other issues may need some resolution before prices can reach back towards the late May trading range. On the other hand, weak Payroll figures could reinforce the market’s general lack of confidence in the US economy and that could send the Dollar sharply lower very quickly. The Dollar may find support near the 74.25 level before the US jobs data, but the magnitude of today’s gains in Non-Farm and Private Payrolls will determine whether the market sees either a new low for the move or an extended recovery.

EURO: The June Euro was able to post another new high for the move, but has given back most of those early gains, as market focus shifts back to this side of the Atlantic. Reports that Greece will accept deeper austerity measures and accelerated privatization measures in order to receive aid from the IMF and the EU provided much of this week’s support, but details of any plan remain elusive and may disappoint the market if reality does not match earlier ideas. The June Euro could see a fresh new high for this move, however, if today’s US jobs data fails to match the market’s already diminished expectations. The June Euro may find resistance near the 145.30 level this morning, but any extended move from these levels will likely be triggered by the market’s general reception towards US Employment data.

YEN: The June Yen recovered from overnight pressure and has climbed back close to 3-week highs. Japanese Prime Minister Kan’s “mea culpa” may have provided some stability for the June Yen over the past few days, but a strong move above the recent highs may be difficult as prices are beginning to reach levels where the Bank of Japan has intervened during the past year. The June Yen may find resistance near the 124.60 level, but could see a sharp pullback if today’s US payroll numbers exceed market expectations.

SWISS: The June Swiss continues to climb towards new record highs, even as risk concerns from the Euro zone appear to be subsiding. While the June Swiss may have had the strongest recent performance of any major currency, there is clearly some vulnerability to end-of-week long liquidation – particularly if there are some surprisingly good US data points released this morning. The June Swiss may retest Wednesday’s record highs near the 119.30 area, but could well have a severe pullback if Payroll numbers do come in stronger than expected.

POUND: The June Pound has fallen down to a new low for the week, pressured by a negatively received private survey of UK non-Manufacturing industries. Sluggish data in front of next week’s Bank of England meeting has made a negative impact on the June Pound, but a poor set of US numbers could see these losses reversed in a hurry. The June Pound may find support near the 162.70 level, but will likely be another currency whose ultimate direction today will be determined by how well US Payroll numbers are received by the market.

CANADIAN DOLLAR: The June Canadian remains under pressure from the pullback in energy prices late this week, and has been unable to return back towards the recent highs. The June Canadian will not have to go through having jobs data from both sides of the US/Canada border within a few hours of each other, but stronger US numbers could help to revive the June Canadian’s recent rally. The June Canadian may find support near the 102.10 level, but should avoid taking out last month’s lows, unless commodity prices come under heavy pressure today.

TODAY’S MARKET IDEAS: The Dollar’s direction will almost certainly be determined by how the market receives this morning’s US jobs data. Stronger than expected Payroll numbers could produce a Dollar recovery back towards the 75.00 level, while weaker data could see the Dollar make a nose-dive back towards the early May lows. The main beneficiary of weak US numbers should in all likelihood be the June Euro, while the June Swiss may hold onto this morning’s support and post another new record high.

Currencies: Swiss May Take Leadership Role

by Dave Hightower on May 25, 2011

DOLLAR: While a number of news services continue to tout the presence of residual Euro zone debt concerns, the Dollar isn’t apparently benefiting from that angle in the early US Wednesday trade. In fact, talk that the US was poised to strike a deal to extend its debt ceiling, in exchange for up to $1 Trillion in spending cuts, only seemed to give the Dollar marginal support. Perhaps the trade thinks the US economy will suffer in the event that austerity measures are implemented, or perhaps the Dollar trade is simply anticipating a soft US durable goods report later this morning. Nonetheless, the June Dollar is showing some slightly positive early action, but so far the charts show an inside day with a pattern of lower highs still developing for this week. It is possible that the Dollar is being partially undermined by talk of a French head of the IMF. Initial up trend channel support in the June Dollar Index today is seen at 76.10 but the US durable goods report might temporarily send the Dollar back below 76.00.

EURO: While a decline in German consumer sentiment readings overnight could have weighed on the Euro, the Euro has generally held together inside the prior two day’s ranges. However, talk of restructuring Greece’s debt package seems to have applied some fresh pressure to European equity markets and that in turn has pushed the Euro downward on its charts. The Euro also saw fresh new lows versus the Swiss overnight and that would seem to leave the Euro vulnerable to more losses ahead. In fact, we think that traders should consider implementing fresh shorts in the Euro this morning, especially if the June Euro manages a bounce off the US durable goods readings. If the outlook for Germany continues to deteriorate that could put the Euro under significant duress and that in turn could mean a decline in the June Euro to the lowest levels since March 17th.

YEN: The Yen seems to have entrenched into a pattern of lower highs and lower lows. BOJ comments overnight seemed to suggest that the recovery from the natural disasters were likely to take time, but that the Japanese fiscal house needed to be reformed even before the quake hit. In fact, the BOJ suggested that the need for further credit easing was on the rise, instead of on the decline and that would seem to suggest that the June Yen is poised for the lowest trade since April 28th. Sell rallies in the June Yen back up to 122.07.

SWISS: The Swiss is in the throes of another flight to quality rise. In addition to slack German consumer sentiment readings, the trade also expects to see rather soft US durable goods news this morning and that would seem to leave the Euro and the Dollar off balance because of classic fundamental news flow. With a restructuring of Greek debt also possible ahead, the June Swiss might be poised for a rise to the highest levels since May 10th. Support in the June Swiss rises to 114.05, with little in the way of resistance seen until 114.84.

POUND: Apparently sluggish UK growth figures haven’t undermined the Pound this morning, as the currency made fresh new highs for the week. In other words, the Pound is seen as the lesser of two evils, when compared to the Euro. Down trend channel resistance today was initially violated at 1.6234 and a close above 1.6225 could cause the currency trade to begin speculating on a more significant recovery in the Pound. Holding back the Pound are concerns that extremely weak UK house hold spending figures at the start of the New Year could present a problem to the currency at higher exchange rate levels later in the year.

CANADIAN DOLLAR: With a fresh downside breakout in the June Canadian putting the currency at the lowest level since March 28th, it is possible that the Canadian is poised to see some stop loss selling by the bull camp. Apparently a more positive view on commodities from Goldman was of little lasting benefit to the Canadian, which looks to maintain a pattern of lower highs and lower lows directly ahead. Next significant downside support in the June Canadian Dollar is seen at 101.58.

TODAY’S MARKET IDEAS: The Swiss might become the primary leadership market, especially in the face of slowing evidence from a number of key global economies.

Gold New High for the Move; Dollar Higher; Corn Plantings Slow

by Dave Hightower on May 24, 2011

Little more positive tone in physical commodities. This somewhat surprising with the Dollar higher this morning and there are some residual concerns that a Greek failure could seriously impact the Euro. Many global equity markets positive overnight. Gold hits new high for the move. Corn plantings still a uncertain.

Currencies: Dollar Off Lows but May Need Good Factory Orders to Keep Going

by Dave Hightower on May 3, 2011

DOLLAR: The Dollar was able to maintain this week’s recovery, although prices were unable to rally outside their recent trading range. The death of Osama bin Laden has not triggered a complete Dollar turnaround, but at least has improved sentiment enough for prices to move well away from the recent lows for the move. Today’s US data may be relatively quiet, but the market may already have shifted focus towards Friday’s key US Employment figures. While the Dollar has plenty of work ahead to move clear of these low price levels, the market appears to be consolidating these recent gains. The Dollar may find resistance near the 73.50 area today, but should stay well clear of yesterday’s lows for the move.

EURO: The June Euro continues to pull back from Monday’s 16-month highs, as debt problems with the peripheral EU nations have begun to weigh on prices again. Today’s Euro zone PPI number indicates fairly strong inflation levels, but the ECB may have to balance those concerns against adding too much pressure on EU nations with problematic debt situations. Although higher Euro zone rates are very likely by the end of summer, the increasing likelihood of unchanged rates at this week’s ECB meeting may help to take prices away from their recent highs. The June Euro may find support near the 147.25 level this morning, but another fresh high for this move, may need to have diminished peripheral EU debt concerns.

YEN: The June Yen was able to extend yesterday’s rebound, and made another new high for the move today. While repatriation support has been a consistent source of strength for the June Yen during the past few weeks, the market may have some difficulty extending this rally beyond the recent highs unless there is some sort of resolution with the Fukushima nuclear crisis fairly soon. The June Yen may find resistance near the 123.75 level, but may have some difficulty posting a strong move above these recent highs.

SWISS: The June Swiss made a new record high during the overnight session, but has since drifted back from those levels this morning. Safe-haven support may be driving the June Swiss up towards new high ground, but quiet news conditions may lead to a moderate pullback over the course of today’s trading. The June Swiss may find support near the 115.20 level today, but this current uptrend is very likely to remain intact and a new high for the move could occur if there is a global risk flare-up during today’s session.

POUND: The June Pound has come under heavy pressure this morning, and has fallen sharply away from the recent highs. A weaker than expected private survey of UK manufacturing has further damaged the case for the Bank of England to raise rates at this week’s meeting. UK inflation remains at elevated levels, but recent data is clearly not strong enough for any new rate hikes to occur. The June Pound may find support near the 164.30 level, but looks to be squarely on the defensive for the balance of today’s session.

CANADIAN DOLLAR: The June Canadian was unable to find any lasting benefit from yesterday’s Parliamentary election, and is falling back towards the lower end of the recent trading range. While the Conservatives were able to form the first majority government in Canada for 7 years, a sell off in gold and crude oil prices this morning has helped to turn the market back towards the downside this morning. The June Canadian may find support near the 104.60 level during today’s session, but could see further erosion of support now that post-election strength has been eroded by commodity weakness.

TODAY’S MARKET IDEAS: The Dollar continues to climb further away from the recent lows, but may need a strong Factory Orders numbers in order to break out above the recent trading range. The June Swiss could see a return towards new high ground if there are any global risk flare-ups during today’s session.

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