Today Prediction:

USD/CAD: Trend: Down
With equities, crude and gold all trading lower, it is surprising to find the CAD so far today, holding steady against the USD. The early excitement did take the CAD to 1.1670 but it has since come back to the 1.1610 level. The dollar rally versus the CAD looks to be stalling, and somewhere in the 1.16 to 1.18 level I wish to be short the USD versus the CAD. Canada is willing to explore and develop their natural resources, while the US policies are designed to "save the world" and strangle the US economy.

Bias: Lower Bias Term: Long Support: 1.1530 1.1470 1.1400 Resistance: 1.1650 1.1740 1.1790

USD/JPY: Trend: Up
This mornings sell off has blown through some previous support in the 95 area and is currently trading at 94.80. It remains to be seen if the global equities sell off will result in a major melt down or remain a modest correction after last quarters vigorous rally. Once the stocks show some stability we want to buy the pair, but think it is prudent to wait, and watch the events. A rally back in the 96.50/97 level seems possible. The US Treasury is auctioning 35B 3 year, 19B 10 year, and 11.B, 30 year bonds this week, all issues of interest to the Japanese. Their participation in this auction will probably mean they will use the current yen strength to buy some dollars.

Bias: Higher Bias Term: Medium Support: 94.60 93.90 93.00 Resistance: 95.20 95.80 96.90

GBP/USD: Trend: Down
Finally the bear got a little satisfaction as they were able to take out the old support at 1.6200, selling off to the 1.61 area. Global equity weakness helped the USD and and plans by the Bank of England to expand quantitative easing by 25B were negative for the pound. This morning's market action was probably exaggerated by sell stops after a new low was printed, and once they have run their course a little bounce might be expected. Try to scalp the short side on a rally back into the 1.6260 to 1.6300 area.

Bias: Lower Bias Term: Medium Support: 1.6150 1.6090 1.5970 Resistance: 1.6270 1.6340 1.6450

EUR/USD: Trend: Down
Currency fund managers reported that first half trading results were mixed as the trend followers failed, while the hit and run swing traders enjoyed some success. The last EURO trend was a good example, ending after about 15 days. After the NFP report. the enthusiasm for equities has abated taking the market south. The dollar bashing at the G8 meeting, has been minimal, so a combination of these two factors has caused the dollar bears to retreat. The pair is currently trading at 1.3910, having failed to hold support in the 1.3950 area. Even if equities stabilize later today, the EURO may have lost some friends and the thrill, for the moment may be gone. Traders can try to sell the 1.3950/1.40 area with a target in the 1.3700 range.

Bias: Lower Bias Term: Medium Support: 1.3890 1.3830 1.3770 Resistance: 1.3970 1.4050 1.4110