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DOLLAR: The Dollar has come under significant pressure this morning as well received Chinese economic data helped to lift macro-economic sentiment. In addition, global markets appear to have taken the negative impact of recent credit rating downgrades in Europe in stride. While this has eroded a large portion of the Dollar’s recent safe-haven support, a further pullback beyond last week’s lows may require clearer signs of progress from Greek debt negotiations. With few US economic numbers this morning that could diminish broad-market optimism, however, the Dollar should remain squarely on the defensive during the balance of today’s session. The Dollar may find support around the 80.95 level and may need another European risk flare-up to recover any sizable portion of this morning’s losses. The Commitments of Traders Futures and Options report as of January 10th for US Dollar showed Non-Commercial traders were net long 44,730 contracts, an increase of 2,337 contracts. The Commercial traders were net short 53,206 contracts, an increase of 3,266 contracts. The Non-reportable traders were net long 8,476 contracts, an increase of 929 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 53,206 contracts. This represents an increase of 3,266 contracts in the net long position held by these traders.

EURO: The March Euro took a large step away from Friday’s lows as the market appears to have gotten past the recent series of credit rating downgrades. A private survey of German economic sentiment also saw the largest one-month increase in history, providing further strength to this morning’s Euro rebound. The wild card remains Greek debt, as a total collapse in current negotiations could derail this week’s rally. The March Euro may find resistance around the 128.20 level and should hold onto a large portion of this week’s recovery by the close. *The “combined” spec and fund Net Short position in the Euro has hit a new record level at 182,037 contracts. *The Non-Commercial Net Short position in the Euro has hit a new record level at 153,142 contracts. The Commitments of Traders Futures and Options report as of January 10th for Euro showed Non-Commercial traders were net short 153,142 contracts, an increase of 15,396 contracts. The Commercial traders were net long 182,037 contracts, an increase of 14,454 contracts. The Non-reportable traders were net short 28,895 contracts, a decrease of 943 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 182,037 contracts. This represents an increase of 14,453 contracts in the net short position held by these traders.

YEN: The March Yen was briefly able to post a new 2-month high before sliding back into the recent trading range. Strong Chinese data has provided some additional support for the March Yen but the upside may be limited given the ongoing threat of central bank intervention. The March Yen may test resistance near the 130.90 level and should hold onto moderate support throughout the session.

SWISS: The March Swiss received a boost from improved Euro zone sentiment, which may have put the brakes on a move towards new low ground. Uncertainty with Swiss National Bank leadership may increase market talk for a removal of their current peg with the Euro, but Swiss economic data needs to improve dramatically to take monetary easing measures fully off the table. The March Swiss may find resistance again near the 105.95 level and should continue to benefit from rising market sentiment in Europe.

POUND: The March Pound has been able to maintain early strength this morning as
improving sentiment from the Euro zone helped to lift prices well clear of Friday’s lows for the move. A sharp drop in UK inflation this morning may have increased chances for fresh quantitative easing later this year but strong equity markets on both sides of the Atlantic will help to underpin this morning’s gains. The March Pound may find resistance near the 154.00 level and would be a major beneficiary of any further broad market rally in equities.

CANADIAN DOLLAR: The March Canadian found considerable support from overnight Chinese economic data as well as from stronger energy and metals prices that lifted to a 2-week high this morning. With the Bank of Canada unlikely to show any sign of easier Canadian monetary policy at today’s meeting, the March Canadian should be able to extend this morning’s early rally. The March Canadian may find resistance near the 98.80 area and could post a new high for 2012 if equity and commodity markets put together a strong up move later in the session.

TODAY’S MARKET IDEAS: The Dollar is likely to remain under pressure thorough the rest of today’s trading and would need another risk flare-up to see any substantial recovery from these current price levels. The March Canadian could make a strong move above the 99.00 level if broad-market optimism fuels a rally in global equity and commodity markets.

This content originated from - The Hightower Report.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has posted a small gain this morning, as trading has remained fairly quiet in front of today’s important market events. While lower global risk concerns are reflected by gains in other financial and commodity markets, the Dollar has generally held onto recent strength as other “safe-haven” assets are feeling more of a negative impact. Low expectations for tonight’s speech by President Obama to be a “game-changing” event may put more emphasis on upcoming US data as a gauge for the market, although any potential for new US quantitative easing may not be fully priced into the market just yet. The Dollar may find support near the 75.50 level early on in the session but will have difficulty retesting this week’s highs unless there are more risk flare-ups from the Euro zone later on today.

EURO: The Sept Euro continues to have trouble recovering from the recent slide in prices, with subdued market conditions helping to keep the market well away from retesting this week’s lows. This morning’s European Central Bank meeting is not expected to produce a change with Euro zone interest rates, although the market’s focus will likely remain on Greek and Italian economic problems. There is a strong chance that post-ECB meeting comments could help to lift the Sept Euro later on this morning but any chance of a sustained recovery will require a much calmer situation with the peripheral EU nations. The Sept Euro may find resistance near the 141.00 level after the ECB meeting but a flare-up of debt problems in Athens or Rome could send prices right back down towards this week’s lows in a hurry.

YEN: The September Yen has avoided a strong move in either direction this morning, with prices consolidating below the recent trading range. Today’s sluggish Japanese economic data has made little lasting impact on the market, as ongoing problems from the Euro zone may be providing a moderate flight to quality lift. The September Yen may find resistance near the 129.50 level today but would need a significant risk flare-up from Europe in order to retest the late August highs.

SWISS: The Sept Swiss remains solidly on the defensive, with today’s slide putting prices at their lowest levels since before the Memorial Day holiday. This morning’s Swiss Unemployment numbers provided little support for the markets, with most of the remaining safe-haven support for the Sept Swiss being obliterated by this week’s meltdown. The Sept Swiss may find support near the 115.55 area during the session, and is likely to stay down near this week’s lows even in the event of a full-scale Euro zone risk flare-up.

POUND: The Sept Pound recovered from a new low for the move overnight, with prices climbing back towards unchanged levels in front of the Bank of England meeting this morning. Although the chances for a UK rate hike are microscopic at best, some positive post-meeting rhetoric could help to lift prices further away from the recent lows. The Sept Pound may find resistance near the key 160.00 level this morning, and may find further benefit from stronger global equity markets once the BOE and ECB meetings are out of the way.

CANADIAN DOLLAR: The Sept Canadian continues to benefit from improving macro-economic sentiment, although prices still have some ways to go before reaching their late August highs. With Canadian economic conditions not as comparatively strong as was the case earlier this year, the Sept Canadian may be more dependent on carryover strength from energy markets in order to extend this week’s recovery. The Sept Canadian may find resistance near the 101.75 level today, and could see a much stronger move above that area if commodity and equity markets put together a large recovery.

TODAY’S MARKET IDEAS: The Dollar should hold onto moderate gains early on in the session, and could find further strength if today’s US data avoids any negative surprises. The Sep Canadian would be a major beneficiary if global equity and commodity market have a broad-based rally later on in the session.

This content originated from - The Hightower Report.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar continues a descent down towards new lows, but does not have the same downward velocity as was seen late last week. A lack of substantive US economic data during the early part of the week has left the market digesting a poor private survey of US Existing Home Sales, which has helped to underscore prospects for widening interest rate differentials between the US and Europe. As long as the market sees the Fed’s quantitative easing program going the full distance and possibly beyond, the Dollar will have a challenge putting together an extended recovery from these levels. US data later on in the week may provide the opportunity for a minor upside move, but for now the Dollar is likely to remain on the defensive during the balance of today’s session. The Dollar may find support near the 75.50 level this morning, but will need help from outside markets in order to lift away from the recent lows.

EURO: The June Euro has been able to hold near the highs for this move, but has been unable to extend this recent rally much further into new high ground. Recent comments by ECB officials appear to have given the market further confidence with projecting Euro zone rate hikes next month, but there are upcoming votes in Portugal and Ireland that could bring sovereign debt concerns back to the market’s attention. Elevated Euro zone inflation levels are likely to keep the June Euro well supported during the next few sessions. However, the sharp rally since last week does leaves some room for a technical pullback if negative news comes in to dampen recent positive fundamental sentiment. The June Euro may find resistance near the 142.40 level later today, but may be in need of additional supportive news to extend this current rally.

YEN: The June Yen has calmed down quite a bit from the extreme volatility of the past few sessions, but has kept up with a gradual move lower this week. The main question in the market will be whether Japanese officials feel these Yen levels are far enough below the recent highs to put the brakes on further intervention activity. While the proximity to the Japanese fiscal New Year may provide another surge of repatriated funds back to Japan over the next several sessions, the threat of fresh central bank activity may keep a lid on any strong upside moves during the rest of this week. The June Yen may find support near the 123.10 level this morning, but chances for a large move outside this week’s trading range remain large enough to keep a very close watch on this market!

SWISS: The June Swiss has been unable to retest last week’s record highs, but global risk levels remain sufficiently high to keep prices at the upper end of this month’s sharp rally. Today’s strong Swiss Trade surplus numbers will help to reinforce ideas of comparatively good Swiss economic conditions, but the June Swiss may need events in North Africa and the Middle East to remain volatile in order to post another fresh record high. The June Swiss may find resistance near the 111.00 level during today’s session, but finding new high ground again may need a fresh news catalyst in order to trigger the move.

POUND: The June Pound moved up to a new 14-month high this morning, as a strong UK CPI number helped to lift prices well into new high ground. Today’s data was a strong sign of high UK inflation levels, but the market will be listening closely for official rhetoric to gauge whether the Bank of England has moved closer to hiking UK rates. The June Pound may find resistance near the 164.00 level today, but any further move beyond that level, may require additional evidence that higher UK rates are close at hand.

CANADIAN DOLLAR: The June Canadian has overcome a sluggish day in the commodity markets to move back towards the higher end of this current recovery rally. While another rally in energy and precious metals prices would help the June Canadian return to the highs from earlier this month, today’s Canadian economic data needs to maintain a positive tone in order for prices to hold at those levels. The June Canadian may find resistance near the 102.50 level this morning, but may need a combination of stronger commodity prices and strong Canadian data to have a chance of reaching new high ground again.

TODAY’S MARKET IDEAS: The Dollar remains squarely on the defensive this morning, and is in need of positive news in order to turn this sell-off around. The June Pound may extend this current rally further into new high ground this morning, as a high UK CPI number has strengthened the case for a near-term Bank of England rate hike.

This content originated from - The Hightower Report.