Daily Commentary for October 2nd, 2006

ISM and Non-Farm Payrolls This Week

Good Sunday Evening, Monday Morning,

We hope everyone had a great weekend. October is finally here which marks the beginning of Major League Baseball playoffs, and crisp Autumn weather. It also appears to be marking the potential for some range breakouts in a few currency pairs. Of course the granddaddy of all the economic data is due on Friday: The US Non-Farm Payrolls. We will analyze this number later in the week. Keep an eye out on US ISM data tomorrow morning, as this number occasionally provides some fireworks to the currency market. Please have a great week and contact us with any and questions you may have.

Technical Indicators

Eur/Usd
German Retail Sales on Friday were actually better than expected, but this was not nearly enough to cause the Euro to gain any strength in this pair. This week EuroZone manufacturing data, and PMI reports dominate on the data front, but more than likely we will see this pair moved around by the US economic data noted above. .2640 is a key support level, as the Euro continues to look bearish against the Buck.

Usd/Jpy
As of writing this, the quarterly Tankan measure of business sentiment has been released and it was mostly positive for the Japanese economy. Unfortunately for Yen bulls, the pair is not behaving the way one would expect after such optimistic data. We are currently 30 pips below the 118.60 high from April, but more importantly this pair is basing very nicely above 118. This is the strongest the Dollar has looked in this pair in a while. Be careful of any Dollar shorts in this pair, as we could possibly see quite a violent move to the upside. Our strategies have been short the Yen for the last week and a half.

Usd/Chf
This pair made a very strong move to .2550 before a retracement to around the .2500 resistance level we pointed out on Friday. It may take strong US ISM data to bring this pair back up to Friday’s highs. Note that there is a large level of resistance in the .2550-.2600 level. Let’s call .2450 as near term support. No Swiss economic data due tomorrow.

What Our Strategies Are Telling Us as of 10/1, 9:00 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

For a 3rd straight sessions are strategies are maintaining the same Dollar long net bias. The nice move by the Dollar against the Yen and Swiss is making our respective strategies happy, while they’re still trying to get a “feel” for what is going on the Euro. Participation is still around 60%. It seems as if our strategies are just sitting on their profits for now.

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