The Dollar appreciated versus most of the major currencies yesterday. The USD gained over 200 points versus the Euro,… … dipping below 1.41 to as low as 1.4050, lows that haven't been seen since October 2007.

This appreciation took place as the markets responded to the US government's seizure and takeover of Freddie Mac and
Fannie Mae. The takeover brings an immediate boost to what has been an ailing credit
and mortgage crisis that has at times crippled the US economy. US stock markets
responded with a resounding tone as the greenback flourished in the currency market.
In his speech yesterday, Federal Open Market Committee Member Fisher strongly
endorsed this takeover by the Treasury Department. Yesterday's fundamental data
included US Consumer Credit, which came in at 4.6B, much lower than the last
publication at 11.0B, showing that consumer spending did lag for the month of
August. Despite the fall of in Consumer Credit, the USD was nearly unstoppable,
surrendering gains to only the JPY, as the Dollar index traded at its highest levels
in over a year.

Today, we can expect several indicators from the US economy, most of which according
to forecasts are set to disappoint current USD trends. The day will begin with a
speech by Federal Reserve Chairman Bernanke who is due to speak at the White House
Initiative on Historic Black Colleges and Universities on the subject of education.
In addition we can expect figures for Wholesales Inventories and IBD/TIPP Economic
Optimism, both of which should hold little significance in how the markets move for
the day. The highlight of the US news day will be the Pending Home Sales indicator,
which is forecasted to show a drop-off of 1.2% since its last measurement. Based
solely on the forecasts of today's fundamental indicators, one may assume that the
USD will depreciate. However, as is the case with the greenback more than any other
currency, when bullishness picks up steam it is very hard to bet against. Expect
volatility in the market today, as behavior should keep the USD in range with
yesterday's highs for most of the day.

* EUR
EUR Prices Continue their Steady Decline
The Euro depreciated versus all of the major currencies yesterday. With a cocktail
of poor local news and the rising USD trend in recent weeks, the EUR has found
itself in deeper and deeper water. With the difficulties currently affecting the
Euro-Zone economy, such as price stability, inflation and the slowdown in growth,
the EUR should have seen a dip, none as big as what has been seen recently.
Yesterday, the Euro lost over 200 points versus the USD and the GBP and suffered
another day of losses against the JPY following the 200 point drop at market opening
for the EUR/JPY cross on Sunday.

Looking ahead to today, the EUR will be left in the hands of global market movement
and US data. The lone Euro-Zone indicator was released early this morning and showed
a slight bullishness for the EUR despite the disappointing result. The German Trade
Balance was forecasted at 17.5B and instead released at 11.8B. Shortly following the
release the EUR/USD pair jumped back above 1.2120.

EUR traders should pay close attention to the global equity markets as well as the
movement in USD and JPY pricing as today's trading session could prove to be just as
active as yesterday.

* JPY
JPY Posts Strong Gains Vs. Euro and Pound
The Yen appreciated versus all of the major currencies yesterday. With the revival
of risk appetite to the market after the seizure of Freddie Mac and Fannie Mae, the
JPY was able to make gains. With substantial gains of over 200 points versus the EUR
and GBP since Sunday's market opening, the JPY has been able to take advantage of
volatile market conditions to erase several months of bearish results against the
majors. Against the USD the Japanese currency saw bullishness for the first time in
3 days. Yesterday, in local economic news for Japan, the Economy Watchers Current
Index was released with a small monthly drop of 1 point as it reported a mark of
28.3, which did little to effect JPY trading.

Today a number of indicators are projected to come out from the Japanese economy.
Early this morning we saw the release of the Machine Tool Orders index that was
expected to drop by 8.9% last month and instead extended losses to 14.2%. The market
was not affected much by the release and continued in its current trend. Later on
tonight Japan will release annual CGPI, which measures the change of prices of goods
sold by corporations and acts as an accurate indicator for consumer inflation. Also
on tap is Japan's Current Account indicator, which is expected to rise to 1.34T Yen
for this month. With a close eye on US stock markets and the movement of the USD and
GBP, traders could see continued gains for the JPY today.

* Oil
Oils Falls in Response to Rising Dollar
Yesterday's trading session saw a drop in Crude Oil prices, largely due to the
bullish movement of the USD. Seeing its highest levels since late 2007, the
greenback, along with news of sufficient oil supplies, pushed prices for Light Sweet
Crude to as low as $104.80 per barrel yesterday.

Supply numbers received a steady boost yesterday as hurricane news from the Gulf of
Mexico showed that Ike, the latest weather system to threaten US oil supply, had
been downgraded to Category 1. Crude Oil also fell following words from Saudi
Arabian Oil Minister Ali Al-Naimi on his arrival to the latest round of OPEC
meetings in Vienna. He stated that supply was ‘healthy' and that prices in the
market were ‘well-balanced'. News from the OPEC meetings will likely drive more
volatile sessions for Crude Oil in the coming day.

Technical News
* EUR/USD
The pair is continuing its downtrend with full steam, and is now traded around the
1.4080 level. As the current price on the daily chart has dropped beneath the
Bollinger Bands' lower boarder, another bearish session could take place. Going
short might be a good strategy today.

* GBP/USD
The cable has resumed its bearish trend and is attempting to breach the 1.7500
level. Should the breach will take place, the pair might extend its bearish run,
with a potential price target of 1.7430.

* USD/JPY
The pair is continuing to provide mixed results, without making a significant
breach. As all oscillators on the 4 hour chart are pointing down, it seems that the
pair could face another bearish session. Going short with tight stops might be the
right choice today.

* USD/CHF
The pair is extending its bullish momentum, and is now traded around the 1.1320
level. The Bollinger Bands on the daily chart are tightening, suggesting that
another sharp bullish move might take place. Going long seems to be preferable.

The Wild Card
* Crude Oil
Oil prices are once again dropping, and a barrel of oil is currently traded around
$105. And now, all oscillators on the daily chart are giving bearish signals,
indicating that oil prices might further drop. This might give
forex traders a great opportunity to enter a very popular trend.

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