U.S. DOLLAR INDEX (DXM6)
The DX opened lower at 87.42 after pressure from the G-7 meeting in Washington for China to allow the Yuan to be more 'flexible' sent the JY (proxy for Yuan buyers) higher and the DX to a morning Lo of 87.40. Prices rebounded to a morning Hi of 87.62 on lower oil prices, but the DX found few takers and drifted lower throughout the session, hitting a daily Lo of 87.12, before bouncing to a close of 87.21, down 56 tics. The DX will need help from economic reports this week, but that might not be enough to challenge the 'rate hike' challenge from the ECB, BoC, BoJ and possibly BoE. The trend remains 'negative', with momentum indicators 'over-sold', suggesting lower prices ahead. Lack of follow-through buying in other majors could see a rebound on any positive economic data. A lower open may find Support at 87.01 and 86.82, while an open above 87.32 should find Resistance at 87.51 and 87.82.

 
CANADIAN DOLLAR (CDM6)
The CD opened higher at .8807 and rose to a morning Hi at our initial Resistance level of .8815, before a 'sell-off' in the energy and metals sent prices to a morning LO at our initial Support level of .8785. Prices rebounded to .8804 as we enter the afternoon session. The CD rose to a daily Hi at our secondary Resistance level of .8828, before drifting lower towards the close to end the session at .8815, up 16 tics. With a rate policy meeting on Tuesday, traders are expecting a 25 bp increase, but will await release of comments before committing further. A 'dovish' tone could spark a bit of volatility as weak longs take s/t profits/risk off the table in light of the weaker energy/metals prices. A higher open should find Resistance at .8834 and .8852, while an open below .8809 may find Support at .8791 and .8766

 
BRITISH POUND (BPM6)
The BP opened higher at our secondary Resistance level of 1.7891 on better than expected Retail Sales figures and DX weakness. Prices jumped to a morning Hi of 1.7893, before retracing to a morning Lo of 1.7805 and bouncing to 1.7854 as we approach the afternoon session. Buyers pushed the BP to a daily Hi of 1.7920, before sliding lower towards the close to end the day at 1.7908, up 82 tics. The s/t trend remains 'positive', but 'over-bought', possibly in anticipation of 'rate increase' speculation by traders. A higher open should find Resistance at 1.7950 and 1.7993, while an open below 1.7878 may find Support at 1.7835 and 1.7763.

 
EURO-CURRENCY (ECM6)
The EC opened higher at our initial Resistance level of 1.2415, hit 1.2417 and retraced to our Pivot level of 1.2379, before rebounding on DX weakness to a morning Hi of 1.2422 as we enter the afternoon session. The EC continued to climb to a daily Hi of 1.2454, before sliding to a close of 1.2448, up 60 tics. Rate hike anticipation and diversification from a number of Central Bank members were enough to keep 'longs' happy for another day. We will see if the traders follow-thru and push the EC to the anticipated Target Hi of 1.2500 or take s/t profit/risk off the table. The s/t trend remains 'positive', but any deviation would be disappointing. A higher open should find Resistance at 1.2475 and 1.2502, while an open below 1.2427 may find Support at 1.2400 and 1.2352.

 
JAPANESE YEN (JYM6)
The JY opened higher at .8769 after pressure from the G-7 meeting sent a 'clear' message to China to allow the Yuan to expand its trading 'band'. A higher Yuan would allow the JY to be more competitive with exports and also increase the amount business with China. Prices rose to .8775, before sliding to a morning Lo of .8750 and rebounding to .8770 as we begin the afternoon session. The JY rallied to a daily Hi of .8822, before drifting lower into a close of .8812, up 180 tics. Too Hi - Too Soon? Could be. Will the short-covering rally be enough to lure spec's further? I doubt if the Min.of Finance will allow pressure on prices before seeing the Yuan incease to a 'new' Hi. Lower oil prices should appeal to traders and help the Nikkei. A higher open should find Resistance at .8839 and .8867, while an open below .8795 may find Support at .8767 and .8723.