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DOLLAR: The Dollar has been able to put the brakes on the recent slide, and has moved away from the recent lows. Sentiment for the Dollar has shown little improvement overall, so this recovery may be due more to a profit-taking move out of European currencies than to a change in trend. US economic numbers have weighted on the Dollar recently, generally being weak but not bad enough to provide a risk shock to the US equity markets. As long as most of the market headlines are being generated here instead of overseas, the Dollar is likely to stay on the defensive, with the chances of an extended recovery limited at best. Even so, the Dollar may be able to rally back to the 81.00 resistance level this morning, as long as there are no surprises from this morning’s US ISM Non manufacturing data.
EURO: The September Euro has lost upward momentum today, and drifted back below the 1.32 level. Today’s Euro zone economic numbers may not have been that bad, but they were more than enough to slow down this current rally. With most of the market’s attention on the US lately, the September Euro may need another risk flare-up or some seriously negative economic news in order to derail the longer-term up move pattern. While a descent towards the 1.3170 level may occur during today’s session, any further move below that area may be difficult without fresh concerning news out of Europe.
YEN: The September Yen continues to be the main beneficiary of the Dollar’s protracted weakness, and is now within striking distance of new 15-year highs. While safe-haven support has underpinned this move higher, there seems to be few fundamental reasons from the Japanese economy to justify this sort of currency rally. With a large portion of their economy tied to exports, it should be no surprise that there is concern from both the Japanese government and the Bank of Japan over the strength of this move. Today’s up move will likely hold during the rest of the session, but the chance for a sharp downside reversal are increasing by the day.
SWISS: Although fairly close to a new high for the move, the September Swiss appears to have lost upside momentum this morning and has begun to drift lower. Look for the September Swiss to continue moving lower this morning, but the Swiss should find support near the 95.75 level as this uptrend should remain intact.
POUND: The September Pound has remained near the top end of the recent rally, but has come under mild pressure from a private survey of UK service industries. Look for the September Pound to find strong support near the 1.59 area as another new high for this rally may occur later on today.
CANADIAN DOLLAR: The Sept Canadian has been able to hold above the 97.00 level, but has been sluggish in extending this move higher. Unless there is another risk flare-up, however, the Sept Canadian should find support near the 97.30 area, as this rally appears to have more strength than other recent up moves over the past few months.
TODAY’S MARKET IDEAS: While the Dollar has held its ground this morning, sentiment has shown little change so any potential for extensive gains may be limited at best. Look for the September Pound to post a new 6-month high later on during today’s session.

