Daily Commentary for September 27th, 2006

Will The Dollar Strength Be Short Lived, Osama Not Dead

Good Tuesday Evening, Wednesday Morning,

The Dollar gained on most other currencies today as the Consumer Confidence data was stronger than expected. Whether the momentum can continue into tomorrow’s session is up for debate. Tomorrow brings us Durable Goods and New Home Sales data. The Durable Goods data is supposed to be positive but the housing data is expected to be weak. Unfortunately this disparity in data might lead to consolidation, leaving volatility to a minimum; a bummer for “day-traders.”

Apparently the reliable source that leaked the news Osama Bin Laden was dead, wasn’t so reliable after all. He wasn’t spotted at a Wendy’s in Kansas, but he also hasn’t been found dead. Therefore, it’s believed he’s still alive and well.

Technical Indicators

Eur/Usd
Our skepticism in reference to the Euro strength on Sunday evening, was proven correct, as this pair has weakened significantly since then, reaching lows of around .2660. The reason for the weakness today was due to a low business expectations index. Tomorrow’s EuroZone M3 data will most likely have an effect if negative. Currently, the chart looks Dollar bullish, but there is a good level of support in the .2650 region.

Usd/Jpy
What a difference a day makes, as the Yen was quite strong yesterday, but was quite the opposite today across the board. Against the Dollar, this pair broke out of the 116-116.50 consolidation. The move was pretty dramatic before topping out at 117.20. Our Yen strategies have been net Dollar long, even during last weeks Yen strength, so I guess it comes as no surprise to their computer chip brains. No economic news is due tomorrow, so let’s see if this pair bases above 117 before making a decision. Give it room to breathe, and use 116.75 as support.

Usd/Chf
We broke out of week long rut of missing the support levels in this pair, as we nailed the .2300 level yesterday. It seems like our Swiss based strategies were on the same page as us, booking a nice short profit, then quickly reversing, currently sitting on a nice long profit. The chart is not very convincing on the Dollar long side, so let’s keep an eye on the Leading Indicator Data tomorrow morning. Use .2375 to .2450 as a near term range.

What Our Strategies Are Telling Us as of 9/26, 7:00 PM ET:

We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

The past 2 trading days have brought nice profits to our Swiss strategies, as they were able to pinpoint the reversal rather nicely. Our Yen strategies have maintained there Dollar long bias, while our Euro strategies have turned neutral. Participation has dropped again to around 40%.

Thank you for your continued support, and keep track of our strategy progress at: http://www.fxstreet.com/technical/si...acker/tracker/ along with the equity charts and real-money profit and loss report on our website. If you would like to receive our commentary before it is released to the public for free in PDF format, please send us your e-mail, and we will gladly include you on the subscribers list.

T2
www.tsquaredtrading.com