DOLLAR: The Dollar appears to be coming out of a volatile overnight session with some strength, and has been grinding higher. US equities have been weak, and the positive vibe out of the Euro zone may be eroding with a rumor that at least one German bank might fail the stress tests. There is one US economic number today to digest, but Housing Starts have been a chronic sore spot for the US economy and that may add to the darkening tone for the markets. While there may not be enough on today’s plate to change the direction of the overall trend for the Dollar, it appears now that new lows may be off the table for now. Look for the Dollar to find resistance up near the 83.05 level, but any further upside move from there, may require some solidly negative news outside of the US to sustain an upside thrust.

EURO: Today’s well-received debt auctions from Spain and Greece helped to send the Sept Euro up to a new high for the move, but a change in direction has sent prices back below the 1.30 in a hurry and that action seemed to be the result of weakening global equity prices. Talk that a German real estate bank might fail the EU’s stress test may be applying some pressure to the Euro, although the actual results will not be released until Friday. Whether this change in sentiment will be enough to fully derail the current longer-term rally attempt in the Euro remains to be seen, but weakening equity prices on both sides of the Atlantic are not helping the Sept Euro’s cause. Look for a further pullback for the Sept Euro down to the 1.2870 level, but the longer-term rally may have enough underlying support to withstand today’s temporary pressure.

YEN: In spite of the elevated risk concerns out of Europe this morning, there has not been much benefit to the Sept Yen so far. With prices already at high levels from the recent sharp rally, there may be signs that the current move may be topping out. While the Sept Yen will likely move back into positive territory from safe-haven support, prices will likely find resistance around the 115.70 area, as the upside momentum appears to be leveling off.

SWISS: While Swiss Trade numbers today indicated a larger surplus than expected, the Sept Swiss has been unable to gain ground due to the carryover pressure from fresh Euro zone problems. There may be some cause for concern, as profit-taking may become heavy if the 94.75 level is taken out today. The Sept Swiss should hold that area today, but there is a distinct possibility of getting swept up in a European liquidation sell off.

POUND: The Sept Pound has been consistently drifting further away from the recent highs, with today’s UK Public Sector borrowing numbers adding an additional negative tone to the market.
The longer-term up trend should remain intact, but there are concerns that pressure on the Euro zone may eventually entangle the Sept Pound in any extended sell off. The Sept Pound may continue to descend towards the 1.5140 level this morning, but it should find support down at those levels.

CANADIAN DOLLAR: Although the elevated risk concerns have taken prices off of their highs, the Sept Canadian has been able to hold its ground, as the market prepares for this morning’s Bank of Canada meeting. There is a general consensus that Canadian interest rates will move higher today, so anything short of that will obviously be a problem. Look for the Sept Canadian to hold the 94.50 support level before the BOC meeting, then we expect the September Canadian to move back above the 95.00 level when and if the rate hike is announced.

TODAY’S MARKET IDEAS: The Dollar should hold this current strength during the course of today’s trading, as risk concerns may provide ongoing support during today’s session. The Sept Swiss is likely to have the best chance of regaining positive territory, and look for the Sept Canadian to see a post-rate hike rally.

This content originated from - The Hightower Report.

DOLLAR: The Dollar has been able to move away from 2-month lows, and it also hasn’t shown any inclination to make any sort of extended recovery. Equity markets have held their ground and might try to move higher again today and that has kept the Dollar off balance. As tensions continue to ease going into the weekend, it may be increasingly difficult for the Dollar to make a dramatic turnaround from its current downward drift. There is always the chance of a surprise news item sending the markets into frenzy, but what currently is on the near-term horizon does not appear to have the potential impact needed to change sentiment on a summer Friday. As long as the tone of the markets remain subdued, the Dollar may grind its way lower with any upside potential capped at the 84.25 level, as the markets finish out the week.

EURO: The Sept Euro has not been able to hold near the 1.27 level so far today, but it does look set to finish out the week in a much better position than it held at the end of June. Recent bank stress tests new items have helped to revive positive sentiment for the Euro zone, even if their criteria may not have been as stringent as the market would have hoped for. With the risks of a debt contagion still being dampened, the Sept Euro should be able to hold these current levels but an end-of-week liquidation move lower is certainly not out of the question later today. Look for the Sept Euro to descend towards support at the 1.2625 level, but the current up move will likely remain intact going into the weekend.

YEN: The Sept Yen continues its tumble from recent highs, and is clearly on the defensive this morning. Although the erosion of safe-haven support has been a key factor, the increasing likelihood that the current government will suffer a setback in upcoming Japanese elections has also weighed on the Sept Yen. While the chances are that this sell off gains momentum next week, the Sept Yen may be limited today to a move towards support around the 112.50 area.

SWISS: Although there has been no major change in the fundamentals, the Sept Swiss has come under pressure this morning, as profit-taking has sent prices away from the highs. The rapid climb over the past month has left the Sept Swiss vulnerable to this sort of price action, but the overall trend remains solidly toward the upside. Further liquidation pressure may take the Sept Swiss below the 94.40 area, but any move of that size would likely present a longer-term buying opportunity.

POUND: The Sept Pound has been able to hold within the current trading range, showing little impact from this morning’s UK economic data flow. The focus for the Sept Pound continues to be on budget austerity measures by the UK government, which provides a strong contrast with the approach being used by the US government. While there may not be enough momentum this late in the week for a test of the highs, the Sept Pound should be able to hold support at 1.5150 as further gains should be expected for this move next week.

CANADIAN DOLLAR: The Sept Canadian will likely take its cue from today’s positive Canadian Employment numbers, as strong economic conditions have been the main supportive factor for the Canadian over the past few months. If overseas risk factors remain quiet, there may be an increased chance that the current rally can be sustained, as risk concerns have derailed the Sept Canadian several times during this period. Look for the Sept Canada to hold support near 95.50 as the chances of upcoming Canadian rate hikes remain strong.

TODAY’S MARKET IDEAS: The Dollar may not have enough momentum for a strong upside move, but should be able to hold overnight gains. Look for any pullbacks in the Sept Swiss and Sept Pound.

This content originated from - The Hightower Report.

DOLLAR: The Dollar has generally held its ground to start the new week, as the G20 meeting produced little in the way of game-changing news. With no major impact for the equity markets as well, there has been a lack of strong momentum either way this morning. While there is a chance that the US Personal Income number may shake things up a bit, there appears to be enough Dollar strength to avoid making new lows for the move today. Look for the Dollar to find support around the 85.50 level, but it may be difficult to start a rebound unless fresh news fires up the market. The Commitments of Traders Futures and Options report as of June 22nd for US Dollar showed Non-Commercial traders were net long 20,710 contracts, a decrease of 1,287 contracts. The Commercial traders were net short 23,745 contracts, a decrease of 935 contracts. The Non-reportable traders were net long 3,035 contracts, an increase of 352 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 23,745 contracts. This represents a decrease of 935 contracts in the net long position held by these traders.

EURO: The Sept Euro found little benefit from the G20 meeting, and has moved lower after being unable to hold a move above the 1.24 level. With the market focus still not fully returning to Euro Zone specific issues, the Sept Euro may find difficulty in sustaining momentum in either direction as the jury is still out on the future. In fact, unless there is a large improvement in overall sentiment, the Sept Euro will continue to find solid resistance around the 1.24 area and support just above the 122.50 area. The Commitments of Traders Futures and Options report as of June 22nd for Euro showed Non-Commercial traders were net short 64,509 contracts, an increase of 9,410 contracts. The Commercial traders were net long 76,225 contracts, an increase of 6,252 contracts. The Non-reportable traders were net short 11,716 contracts, a decrease of 3,158 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 76,225 contracts. This represents an increase of 6,252 contracts in the net short position held by these traders.

YEN: A weak Japanese Retail Sales numbers overnight has weighed on the Sept Yen, but there has been enough carryover strength from last week’s rally to keep prices in a relatively tight range so far. Although safe-haven support will remain a key factor, look for the Sept Yen to test support near the 111.50 area as there has been little positive news from Japan to sustain prices at these levels particularly because the flight to quality angle doesn’t appear to be playing loudly today.

SWISS: Comments from a Swiss National Bank official that deflationary risks were easing have helped to drive the Sept Swiss to new highs for the move. With the continued support coming from a string of new all-time highs against the Euro, the Sept Swiss looks to have the strongest momentum of any of the major currencies today. Look for the Sept Swiss to make a run at resistance above the 95.60 level during today’s trading.

POUND: While the Sept Pound has lost some of its upside momentum, an ability to consolidate above the 1.50 level indicates the underlying strength behind the recent rally. There may be another move towards support at 1.50 today, but look for the longer-term rally bias to remain intact.

CANADIAN DOLLAR: The Sept Canadian has been able to grind its way higher, but remains well below last week’s highs. Quieter markets may provide an opportunity for further gains today, but the upside for the Sept Canadian may be capped off around the 97.00 level as US scheduled data might serve to dampen expectations for North America later this morning.

TODAY’S MARKET IDEAS: The Sept Swiss has the benefit of fresh news to propel this rally, and looks to have further upside potential during today’s trading.

This content originated from - The Hightower Report.

DOLLAR: After showing some overnight strength, the Dollar turned around and moved lower this morning, reaching the lowest level since the middle of May. There has been a change in tone, as the results of today’s sovereign debt auctions in Spain and France were well received by the market and that has apparently dampened market fears of further problems in the Euro Zone. While the chances that a longer-term change in direction for the Dollar will require time and further substantive actions, the recovery in equity markets on both sides of the Atlantic will likely keep the Dollar bulls on the defensive this morning. Today’s US economic numbers will give the market plenty to digest later in the session, so we may not have seen the last of today’s volatility. However, the Dollar looks to be on the defensive going into the opening and may need some positive news of its own to find some support. With momentum against it, look for the Dollar to find support down near the 85.75 level.

EURO: While today’s sovereign debt auction in Spain indicated plenty of demand from the marketplace, the potential of a 4.86% yield from a Euro-denominated 10-year bond may have had a lot to do with today’s enthusiasm as well. In any case, the Sept Euro has found plenty of strength from the auction results both in Spain and France and therefore the Euro bulls looks to have the upper hand for today’s session. With the Euro now reaching towards the highest levels since late May, however, it will be interesting to see whether this week’s recovery has enough momentum to achieve an upside breakout. The Sept Euro is likely to make a test of resistance near the 1.2430 level during today’s session particularly if today’s US economic numbers give a boost to the equity markets both in the US and in Europe.

YEN: The change in market tone for the Euro Zone may ultimately put pressure on the Sept Yen, but prices have been able to hold up well this morning in spite of the change in Euro Zone sentiment. Look for the Sept Yen to find support around the 109.45 area, as it appears that safe-haven support may not exit the trade quickly.

SWISS: The news highlight of today’s Swiss National Bank meeting was the removal of a pledge to intervene against excessive gains against the Euro. This had the effect of a sharp rally, taking the Sept Swiss above the 90.00 level very quickly. Although the market may have lost upward momentum, the overnight gains have held up fairly well going into the US opening. While the move higher was fairly quick, look for the Sept Swiss to make a further move up to the 90.25 area, if the positive vibe for Europe can sustain itself through today’s US report slate.

POUND: With the market’s attention on other areas of Europe this morning, the Sept Pound has not found much in the way of carryover support although there has been a large recovery from overnight lows. Even with a stronger UK Retail Sales number this morning, look for the Sept Pound to lag behind the Euro and the Swiss as the unwinding of cross-spreads may keep the pressure on.

CANADIAN DOLLAR: If today’s Euro Zone debt auctions play a role in dampening risk aversion throughout the markets, then the Sept Canada should be a major beneficiary. The monthly survey of Canadian Manufacturing may prove to be a hurdle after the opening, but Canadian economic numbers have been relatively strong over the past few months. Look for the Sept Canada to make another test of the highs at 97.75 this morning, especially if economic numbers on both sides of the US/Canada border are strong.

TODAY’S MARKET IDEAS: The Dollar is likely to stay under pressure this morning, especially if there are no negative surprises from the US economic numbers later on in the day. The Sept Swiss should remain well supported this morning, but the Sept Canada still looks to have the most upside potential from present levels.

This content originated from - The Hightower Report.

DOLLAR: After a two-sided night of trading, the Dollar finds itself slightly weaker going into the US opening. The risk aversion theme that has kept the Dollar close to 14-month highs may be fading somewhat as the market approaches the holiday weekend, but there are plenty of factors still in play that are likely to keep any extended move lower from occurring during this session. Comments from Chinese officials on the Korean situation and how European debt problems will affect the global economic recovery have reinforced the Dollar’s safe haven support, although that may dissipate if the general recovery in world equity markets extends itself into today. Today’s US Personal Income numbers may provide some direction if they surprise the market, but there are too many unresolved areas of concern for the market to contemplate a full scale Dollar retreat. Look for the Dollar to hold support near the 85.75 level, but the Dollar will still need some substantial news in order to move any further to the downside.

EURO: Although the June Euro has been able to extend yesterday’s recovery, much of that move has been due to end-of-month rebalancing in front of the holiday weekend. With the Chinese placing blame on European debt problems, and with news that the city of Rome was placed on a negative credit rating watch yesterday, the burden of proof for a recovery has been placed squarely on the June Euro’s shoulders. If world equity markets can find enough strength to have a second day of large gains, there may be some hope of a move beyond 1.25 but the concern of being long over a holiday weekend may act to limit any upside potential. The June Euro is likely to find resistance near the 1.2450 level, but the June Euro will need a new catalyst for an extended move towards the upside.

YEN: Already pressured by the erosion of safe-haven support, the June Yen was forced to deal with two negative Japanese economic numbers overnight. Japanese Unemployment was higher than expected, while the Japanese CPI had a larger than expected decline. With both numbers pointing towards an economy that needs to be revived quickly, the gains that the June Yen has posted over the past few weeks have to be seen as a huge economic liability. While the approaching holiday weekend may keep prices somewhat supported, the June Yen may look to again trade near support around the 109.40 level as quieter news and stronger equity markets remove a great deal of its risk aversion strength.

SWISS: A stronger than expected Swiss Leading Indicator number this morning may illustrate the relative strength of their economy versus the rest of Europe, but may have little in the way of immediate impact, as the Euro continues to recover this morning. Even so, look for the June Swiss to make a run at resistance levels near the 87.40 level, as a quieter pre-holiday trade should insure that the lows for the move have been put in earlier in the week.

POUND: The June Pound’s breakout of the recent trading range has seen little in the way of follow-through this morning, but prices have been able to withstand a weaker than expected UK Consumer Confidence number from last night. There appears to be enough positive pan-European sentiment out in the markets to hold the June Pound in positive territory, but the lack of upside momentum going into a holiday weekend should leave prices finding resistance near the 1.4650 level.

CANADIAN DOLLAR: June Canada continues to extend a recovery rally into today’s session, as the move away from risk aversion has been a major supportive factor for the commodity currencies over the past few days. With a relatively strong economic situation already in place, the June Canada is likely to see this move hold going into the weekend. Look for the June Canada to make a run at resistance near the 95.90 level, as quieter markets reinforce the strength of its recovery.

TODAY’S MARKET IDEAS: While the Dollar may be under pressure at the moment, the volatile trade overnight may indicate that caution be applied to holding any long position in the European currencies. Look for the June Canada to extend its recovery rally going into the weekend.

This content originated from - The Hightower Report.

After being on the verge of making a new 8-month low against the Dollar, the June Yen proceeded to have a monumentally large rally during the market turbulence of May 6th, far exceeding the size of any other currency move that day. This rally was so severe that the June Yen’s low and high prices for 2010 were achieved within 13 hours of each other. Even though most of those gains were given back within a day or so, the Yen has continued to find strong safe-haven support whenever there has been any sort of flare-up of EU sovereign debt problems. The most recent example of this was on May 19th, when the announcement of a unilateral German short sale ban created a risk aversion shock to financial markets worldwide. While it is definitely too early to think that the European crisis has been completely resolved, the 750 billion Euro crisis prevention plan developed earlier this month has meant that no other EU nation has as yet reached the crisis stage that Greece reached a few weeks ago. It is also important to remember that the Japanese government has made it clear that they are looking for a much weaker Yen, mainly to assist the recovery of their deflationary economy.

Recent Japanese economic data has provided some signs of revival, but there are still key numbers which remain solidly weak. The latest edition of the key Tankan survey continues to be negative, while both Japanese CPI and PPI have been lower for the past few months, illustrating how entrenched deflation has become with the Japanese economy. Although very low interest rates in Japan may hamper any monetary policy moves that the Bank of Japan may consider, it is likely that any sort of stimulative action undertaken will result in a much larger Japanese money supply. It is unlikely that recent plans for deficit reduction in Japan will find much support, as an aging population and a reluctance to embrace immigration as a measure to increase the Japanese workforce have made reviving the economy the main priority. If events outside Japan start to calm down, it is more likely than not that the June Yen will make another run at the lows from earlier in the month. An extension of the recent safe-haven rally due to EU tensions may provide enough of a price boost to the June Yen for us to approach the short side.

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This content originated from - The Hightower Report.

DOLLAR: The Dollar has retained its safe haven strength this morning as a lack of progress in resolving a now expanding European sovereign debt crisis may be adding to a capital flight out of Euro-denominated assets and into the US Dollar. While the chances for a full default are still remote, the loss of investment grade status on Greek debt creates its own set of problems for many investment firms who are unlucky enough to still be holding those issues. Equally frightening to the market was the Portuguese credit downgrade yesterday, which may only be starting to have a Greek-type decline, but as yet has an unknown price tag for the EU. With events in Europe holding the market’s focus, the FOMC announcement later today has probably lost some of its relevance but it would seem almost impossible that the Fed would make any sort of move in the wake of yesterday’s events. As long as EU debt concerns hold the market in its sway, the Dollar will remain well supported across the board. Unless there are concrete moves towards a solution to this crisis and that doesn’t look to be in the cards today, look for the June Dollar to hold its gains above the 82.50 level and perhaps make even more new highs for the move.

EURO: The June Euro remains under pressure this morning as a resolution to the EU sovereign debt crisis still appears to be far away. The May 19th deadline for Greece to find some sort of aid package in order to roll out some longer-term debt may provoke some sort of compromises over the next few weeks, but as long as political posturing on both sides takes center stage, the June Euro is likely to be remain under selling pressure for the near future. While the chances for a sharp short-covering rally rise whenever officials start to make statements, look for the June Euro to continue its descent past the 1.3120 level unless concrete steps are put into place quickly. The Germans don’t want Greece to get off easy, but they might have already shot themselves in the foot by allowing the Greece crisis to undermine the situation in Portugal.

YEN: The benefit that the June Yen was receiving from European weakness has been turned around overnight, as risk aversion strength may have been offset by ideas that many in the government are looking for a weaker Yen in order to stimulate the deflationary Japanese economy. Unless there are further problems in Europe today, look for the June Yen to head back towards the 106.00 level.

SWISS: The June Swiss has been fairing the best of the European currencies as a flight-to-safety finally appears to be giving the Swiss some benefit. While the Swiss National Bank is likely to be keeping any gains versus the Euro in check, look for the June Swiss to hold its lows above the 92.00 level.

POUND: Politics has finally taken a back seat for the June Pound as it has been caught-up in the general weakness in European currencies. Although the ideas that the UK will be caught up in the sovereign debt contagion are a stretch at best, it does point to the fiscal problems that the new government will have to contend with after the May 9th election. While the June Pound should benefit from any Euro-related rally, look for any gains to be capped off around the 1.53 level unless there are new UK election-related developments.

CANADIAN DOLLAR: The June Canada has had the worst performance of the major currencies since the European credit-downgrades, as the risk aversion wave has caused a flight out of riskier currencies like the June Canadian. With the economic situation in Canada remaining positive, any sort of support found near these levels may be the start of an eventual move higher but recent price action should lead any longs to proceed cautiously.

TODAY’S MARKET IDEAS: A relief rally may take the European currencies off of their lows, but unless the market sees a solution to the EU debt crisis on the horizon, the Dollar is likely to hold its strength over the near future.

This content originated from - The Hightower Report.

DOLLAR: The Dollar has seen some benefit from the turbulence overnight in the markets and it might take rather stellar US economic data this morning to rekindle interest in riskier Non Dollar instruments. It looks as if today’s flare-up in the Greece debt situation may provide another round of flight-to-quality support for the Dollar today, but the lack of fresh domestic news over the past few days, has seemingly allowed global macro economic psychology to deteriorate. We aren’t even sure if the US economic readings will be able to countervail fears toward the Euro zone today! With the US equity markets also losing their upward momentum, along with weakening in several key physical commodity prices, the interest in riskier assets is highly suspect. Therefore conditions today are likely to keep the US Dollar well supported through the day, as good US data might not prevent a move back toward the 82.00 level later today.

EURO: The news that Greece’s deficit for 2009 was being revised up to 13.6% of their GDP has sent the June Euro tumbling lower again, as that put the EU/IMF aid package squarely into the markets focus this morning. With the added effect of sending Portuguese default swaps to record high levels, news that negotiations between Greece and their EU/IMF benefactors may take up to three weeks to hammer out details, raises plenty of uncertainties. The recent string of good Euro Zone economic data points may be helping to put the brakes on this move lower, but as long as the Greece debt issue holds center stage for the June Euro, it is difficult to see this market throw off the downside bias on the charts. In fact, without stellar US numbers and perhaps even a recovery in US equities the June Euro might not be able to avoid a retest of this year’s lows this week.

YEN: A report from a credit agency expressing concern over Japan’s creditworthiness put the June Yen under mild pressure overnight, but the Yen has found some support from the weakness in European currencies. This sort of news underscores how the relatively weak economy in Japan will certainly need to see lower interest rates over the near future. While the longer-term outlook may be negative, today’s events in Europe may help to keep the June Yen supported above the 107.50 level unless US economic data is shockingly good.

SWISS: European weakness this morning is dragging the June Swiss down, as it does not appear as yet to be receiving any support from the Greece deficit revisions. The decent Swiss trade numbers earlier in the morning gave the Swiss some support, but it appears that the June Swiss may be sizing up a move back below the 93.00 level during the next few hours.

POUND: The June Pound continues to find some support from UK retail sales data, and will likely find some benefit from today’s problems in the Euro as well. With today’s second electoral debate keeping the political impact on the June Pound quiet over the next few hours, the June Pound should at least stay well supported against the other European currencies but perhaps weak against the US Dollar and the Yen. A run at the highs near 1.5520, is likely to be prevented today in the face of lingering concern for the pace of the global recovery.

CANADIAN DOLLAR: June Canada continues to frustrate the market by failing to hold moves above the 100.00 level. In spite of solid economic data and the Bank of Canada’s clear intent to show Canadian interest rates will be heading higher, the June Canada may have difficulty holding these levels if today’s events in Europe bring back risk aversion top non Dollar assets. While a move back to Monday’s lows is highly unlikely over the near-term, the June Canada may need to see a move back down to 99.60 before the long side can be looked at again.

TODAY’S MARKET IDEAS: The Dollar is likely to stay well supported this morning, particularly against European currencies.

This content originated from - The Hightower Report.

DOLLAR: After some heavy initial pressure overnight versus the Euro, the Dollar has found some support as the reality of the Greece situation has taken some downside momentum out of the market. While having concrete details about a potential $40 billion EU/IMF aid package provided European currencies with a measure of support this morning and that in turn undermined the Dollar, it is important to remember that Greece still has to ask for this aid first, something that they have not done yet. The market may have to wait until Greece tries to sell some debt in the market this week before we see whether the aid package will be implemented. With little in the way of economic input from this side of the Atlantic, before the Treasury Budget announcement late in the session today, we may continue to see the focus of today’s trading remain on European issues. While well below its recent range, look for the Dollar to remain toward the upper end of today’s early trading range and possibly head back towards the chart gap area that was left just above the 80.85 level. A number of markets seem to have had a major knee jerk reaction to the EU Package news and have failed to sustain their initial reactions and that might suggest that all markets have indeed over reacted. Therefore we suspect that the June Dollar index will manage to hold above close-in support of 80.52 today. The Commitments of Traders Futures and Options report as of April 6th for US Dollar showed Non-Commercial traders were net long 30,248 contracts, a decrease of 5,040 contracts. The Commercial traders were net short 33,306 contracts, a decrease of 6,158 contracts. The Nonreportable traders were net long 3,058 contracts, a decrease of 1,117 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 33,306 contracts. This represents a decrease of 6,157 contracts in the net long position held by these traders.

EURO: The June Euro started out overnight trading above its trading range for the past few weeks, but it has been unable to build upon that sharp rally as the market appears to be somewhat skeptical of whether the EU aid package will live up to the initial hype. Although Greece is saying that they have not yet asked for this aid, it is clear that a 200 basis point benefit from where Greece debt currently trades and what the EU/IMF package will charge in interest almost compels them to go with the aid. Also, there are some strong doubts that this 16-nation consensus will hold, if other EU nations come forward asking for help, or if possible Greece repayment problems escalate into a test of the EU’s “no-bailout” clauses. The timing of these announcements over the weekend had no small part in the market’s severe reaction to this aid package, and has likely helped the June Euro put in a near-term high. While remaining well supported, it is more likely that the June Euro will move back towards Friday’s highs around the 1.35 level than make a test of the overnight highs near 1.37. The Commitments of Traders Futures and Options report as of April 6th for Euro showed Non-Commercial traders were net short 64,017 contracts, a decrease of 19,183 contracts. The Commercial traders were net long 73,813 contracts, a decrease of -22,152 contracts. The Non-reportable traders were net short 9,796 contracts, a decrease of 2,969 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 73,813 contracts. This represents a decrease of 22,152 contracts in the net short position held by these traders.

YEN: Early strength from the broad-based Dollar weakness has dissipated, and the June Yen looks to be weaker going into the opening. Comments made by Bank of Japan officials indicate that there is a difference of opinion on the need for more Japanese rate cuts in the near future. However, the deflationary economy in Japan may ultimately have the final vote and that should keep the June Yen lagging behind most of the major currencies over the near future. Look for the June Yen to continue its move below the 107.00 level.

SWISS: The June Swiss has received the most carryover support from this weekend’s EU/IMF deal, gaining back much of what it lost from last week’s post-intervention sell off. However, the near-term easing of Greece debt tensions will continue to keep the June Swiss under pressure against the Euro and should keep the market well away from making new highs. Even so, the June Swiss is more likely to hold last night’s lows near the 94.25 levels, as its overnight move was nowhere near as violent as the June Euro move.

POUND: Although the June Pound has extended last Friday’s rally into this week, early strength has been eroding as the market appears tentative to move outside of its recent range. Political factors are starting to override economic numbers, as the first weekend of the election period saw agreement over the issue that a “hung” Parliament would be problematic for the UK economy. With the Dollar still likely to remain weak this morning, look for the June Pound to stay above the 1.54 level but it is also unlikely to make a move towards new highs.

CANADIAN DOLLAR: June Canada is still coming under pressure from Friday’s Canadian Employment numbers, but has held those lows and is still within sight of parity this morning. The weak US Dollar this morning may keep the market on the defensive, but given the underlying strength in the Canadian economy, it is unlikely that we will see a move below this recent trading range. June Canada may test the lows later today, but is also likely to head back towards the 99.75 level over the next day or so, with another attempt to break above 100.00 likely in the cards this week.

TODAY’S MARKET IDEAS: While European strength is likely to be the story of the day, we may have already seen the highs made during overnight trading. Look for a successful test of the lows today as a first step towards the June Canada making another run at parity with the US Dollar.

This content originated from - The Hightower Report.

DOLLAR: Although trading has been quiet so far, the Dollar has drifted higher this morning in anticipation of today’s U.S. Employment numbers. Much of that support has come from profit-taking in front of today’s numbers, with only the Yen following through with its current trend and making a new 10-month low overnight. A strong non Farm payroll number this morning is likely to cause broad-based Dollar strength, particularly against the Yen where economic conditions remain relatively weak. On the other hand, any sort of negative surprise with either the Non-Farm number or the Unemployment rate could trigger a selloff, with the Euro, Pound and Canadian likely to be the main beneficiaries. Although prices have fallen away from last week’s highs, the Dollar has only moved back towards the high end of its trading range from early February to late March. Whether it remains there could depend on how this morning’s numbers are received by a thin, pre-holiday market.

EURO: The June Euro has remained close to the high end of its recent rally off of last week’s lows, but profit-taking has caused it to slide lower going into this morning. With the recent positive tone of Euro-Zone economic numbers, and with the E.U. sovereign debt crisis fading towards the background, prices have been able to recover from their recent lows. This could change very quickly if we have a strong non Farm Payroll number, as the June Euro could head back to this week’s lows in a hurry.

YEN: The June Yen continued to head lower overnight as it produced a new 10-month low for a fourth day in the row. With deflationary pressure limiting the possibility for growth in Japan, the Yen has been particularly weak against the Dollar. While it would take a huge change in sentiment to reverse the current trend, prices may be vulnerable to a sharp short-covering rally if today’s numbers fail to match expectations. However, look the Yen to extend itself to the downside if these numbers are anywhere close to market forecasts.

SWISS: Yesterday’s massive selloff, in which the June Swiss went from 0.9587 to 0.9435 in 10 minutes, has scared the market to such an extent that prices have now found a new trading level well below yesterday’s highs. The rally up to new all-time highs against the Euro appears to have been the final straw for the Swiss National Bank, as it is likely that they finally made good on their earlier threats of intervention. With this activity taking precedence with the June Swiss, any reaction to today’s Employment numbers is likely to be muted.

POUND: This week’s rally in the Pound seems to have run out of steam, as profit-taking in front of today’s numbers appears to have prevented a test of last month’s highs. With the upcoming U.K. elections taking more of the market’s focus away from recently positive economic numbers, trading could get choppy and two-sided over the near future. However, weak Employment numbers on this side of the Atlantic today have the opportunity to lift the Pound well above its recent trading range.

CANADIAN DOLLAR: Surprisingly enough, it has been the June Canadian which has been the weakest currency against the Dollar so far this morning, as a move to new highs seems to have derailed by overnight profit-taking in front of today’s Employment numbers. With the strong correlation of the U.S. and Canadian economies, a stronger than expected Non-Farm Payroll number has the potential to send the June Canadian up beyond last month’s highs and close to parity with the U.S. Dollar.

TODAY’S MARKET IDEAS: Given the uncertainty over today’s Employment numbers, along with the illiquidity of pre-holiday markets, traders should lean towards using option strategies ahead of futures in order to limit their risk.

This content originated from - The Hightower Report.