U.S. DOLLAR INDEX (DXU6)
The DX opened higher at 86.41 as traders continue to 'cover' shorts and adjust positions ahead the FOMC announcement. Prices rose to a morning Hi at our initial Resistance level of 86.45, before sliding to a morning Lo of 86.22. Prices bounced to 86.37 as we enter the afternoon session and the 2:15 pm est results. The Fed raised s/t rates 25bp to 5.25% and suggested it would keep a close eye on the economic data to contain inflation. Traders rotated out of the DX and into most other major foreign currencies, sending prices to a daily Lo of 85.48, before ending the session at 85.50, down 77 tics. The reversal-day sends the DX below the 18 day MA and changes the s/t trend to 'negative' as momentum indicators reflect the sell-off. If the Fed is signaling a 'pause' going into the August 8th meeting, the DX could come under further pressure as traders sell Dollars to buy EC, sending prices lower. A lower open may find Support at 85.17 and 84.84, while an open above 85.81 should find Resistance at 86.14 and 86.78.

 
CANADIAN DOLLAR (CDU6)
The CD opened higher at our initial Resistance level of .8952, as higher energy/metals prices lend support against a stronger DX. Prices rose to a morning Hi of 90.17, before a weaker than expected CPI of 0.1 sent prices to .8985 as we begin the afternoon session. The CD and all other major foreign currencies benefitted by the FOMC rate decision and 'dovish' tone of the statement. Prices rose to a daily Hi of 90.31 and ended the session a tic lower at 90.30, up 97 tics. The s/t trend has changed to 'positive', along with improving momentum indicators, as a weaker DX and stronger energy/metals prices support a move to the next level. A higher open should find Resistance at .9058 and .9087, while an open below may find Support at .8974 and .8919.

 
BRITISH POUND (BPU6)
The BP opened lower at 1.8158 and rebounded to a morning Hi of 1.8190 as the DX sold off at Resistance. As the DX rebounded, the BP retraced to a morning Lo of 1.8131, before bouncing to 1.8141 as we begin the afternoon session. The BP jumped to a daily Hi of 1.8335 on the DX sell-off, before sliding to a close of 1.8329, up 109 tics. Despite the strong close, the s/t trend remains 'negative' until a close above 1.8332, which will likely occur, as the 'outside-day' up close sends a 'bullish' signal. Momentum indicators are improving and we will see if there is 'follow-thru' buying as we head into the weekend. Pressure from a stronger EC could limit the enthusiasm. A lower open may find Support at 1.8190 and 1.8052, while an open above 1.8263 should find Resistance at 1.8401 and 1.8474.

 
EURO-CURRENCY (ECU6)
The EC opened lower at our initial Support level of 1.2595 and rebounded to a morning Hi of 1.2624 as the DX retraced. Sellers took control and sent the EC to 1.2599 as we begin the afternoon session. The EC jumped to a daily Hi of 1.2736 and ended the day at 1.2732, up 106 tics. The large-range up day and improving momentum indicators along with a possible 50 bp rate increase, change the s/t trend to 'positive'. Prices could climb to the previous Target Hi of 1.3000. A higher open should find Resistance at 1.2783 and 1.2834, while an open below 1.2685 may find Support at 1.2634 and 1.2536.

 
JAPANESE YEN (JYU6)
The JY opened lower at our initial Support level of .8679 and slid to a morning Lo of .8674, before rebounding on the DX weakness to a morning Hi at our secondary Resistance level of .8725. As we begin the afternoon session the JY is at .8706. The short-covering rally sent the JY to a daily Hi of .8795, before closing at .8792, up 100 tics. The 'outside-day', up close changes the s/t trend to 'positive' as momentum indicators look to turn higher. Follow-thru buying will be necessary, otherwise a return to the lower levels are likely. A higher open should find Resistance at .8833 and 8875, while an open below .8754 may find Support at .8712 and .8633.