… to earlier expectations of a 96.4,
bolstering notions that aspects of the euro zone economy are indeed
turning around.

Addiitonally contributing to further euro bullishness,
today's import price index vaulted higher for the month of September.
Rising 4.7 percent on an annualized basis in the previous month,
inflation rose 5.1 percent. Coupled together, traders bid the
underlying major higher on rising speculation that interest rates in the
region may have to rise earlier than expected. Sparking current
sentiment were earlier suggestions by central bankers including Chief
Economist Otmar Issing that low rates look to rise “inevitably”

U.S. Consumers To The Downside
Conversely, dipping to a two year low, U.S. consumer confidence
declined against expectations that a recovery from Hurricanes Katrina
and Rita would bolster domestic demand. The Conference Board's
October survey fell to 85, below estimates of 88.1 and below the
previously revised September figure of 87.5. Notably, higher gasoline
prices continued to pressure consumers, ultimately dampening
consumption.

Technically Speaking
After vaulting from the 1.1950 figure, the euro major rose above the
1.2100 level briefly. Now, 184 pips higher, the price action looks to
temporarily dip before any further upward direction can be made. Near
term floors exist at 1.2050 with a break bringing an inevitable test of
the 1.2025 (38.2 percent fib level).

GBPUSD

Stable Interest Rates
Even with the exit of one of the more hawkish members of the Bank of
England, speculation is now running higher that an interest rate cut
will not be needed till further assessment can be made going into 2006.
Running on previous momentum from upbeat retail sales figures, traders
are intiating long positions as the housing market shows signs of
stabilization along with continually lofty inflationary levels.
Nonetheless, improvements in October's industrial trends survey look
to be needed before a confirmed upward bias in the underlying major can
be confirmed.

Bush's Choice Is Bernanke
Although noted yesterday in a conference, confirmations of Bernanke's
ascension to the role of Fed chairman offered some instability to dollar
bulls. Although confirming the notion that he would follow in the
footsteps of the incumbent Greenspan, the public has not solidified
Bernanke's stance on monetary tightening, as with any new position or
individual. As a result, with anticipation high, some uncertainty may
look to add incremental pressure to the greenback.

Technically Speaking
Breaking out of consolidation, the underlying major broke through the
top side resistance at 1.7700 to hit the intrasession high of 1.7872.
However, much like the euro major, the overextension in the spot price
may lead to a slight retracement before any confirmed directional bias
can be established. As a result, the 1.7800 figure looks to prove a
mild floor with the former resistance at 1.7702 (38.2 percent fib level)
considered a stronger support.

USDCAD

Inflationary Concerns Lead To Speculation
Surprising the market today, consumer inflation in the Canadian economy
vaulted higher than economists expected. Estimated to rise 3.3 percent
on the annualized comparison, inflation in the world's eighth largest
economy soared to 3.4 percent, exceeding the 2.6 percent rise last
month. Now, considerably above the 2 percent central bank benchmark,
Bank of Canada Governor David Dodge may be forced to continue raising
interest rates as previously mentioned. Speculators took that notion to
the bank along with further speculation that demand would be revived as
we enter the fall season. Crude oil contracts for December delivery
rose on the session, rallying above $62 a barrel to $62.25.

Technically Speaking
Previously finding the 38.2 percent fib level from the intersession
move, the hovering price action surged down below all three support
floors with conviction. Signaling the downturn looked to be the
textbook head and shoulders formation after the underlying spot spiked
through the 1.1900 figure. Resting above the 1.1750 support, a
penetration below would lead to a test of support at the 1.1706 spike
low from October 20th.

Sending money abroad? Converting currency?