The USD saw a bullish trading session versus all of its major currency crosses yesterday. The USD took advantage of… … the falling Crude Oil Prices that reached a four month low and some bearishness by its counterpart currencies.

Against the EUR,the USD reached its highest value in more than half a year as the pair traded under
1.46. The biggest gains for the USD were seen against the weak GBP as the two were
traded in the low 1.79's.

There were no economic data releases for the USD yesterday because of the Labor Day
holiday and the closed markets, however much volatility was seen from the greenback.
In Federal Reserve Governor Randall Kroszner's speech yesterday, he noted that the
influence of U.S. housing and financial problems on economic weakness elsewhere
demonstrates how intertwined the world's economies are and explained that the theory
that the USD had become independent from the world's economies is incorrect. The
other main spark for the USD volatility was the larger than $4 drop in Crude Oil
prices, which occurred as Hurricane Gustav hit the United States weaker than
expected. Louisiana Governer Bobby Jindal estimated that roughly one fifth of the
oil and natural-gas output that was shut prior to Gustav could be back on line by
the weekend and no major damages have been reported by the oil companies thus far.

In terms of economic data, today will be a lot more interesting for the USD. There
are 3 economic releases expected to be released at 2:00 GMT with the ISM
Manufacturing PMI being the main release. As it measures the level of diffusion
based on surveyed purchasing managers in the manufacturing industry, this index is
expected to slight fall along with the ISM Manufacturing Prices. The other economic
indicator, the Construction Spending, is expected to slightly rise compared to last
month. Overall, it seems like trades should keep track of Hurricane Gustav's
developments and the three releases which are expected to add volatility to the USD
trends with their mixed expected results.

* EUR
EUR/GBP Reaches Record High.
Following yesterday morning's paramount release of the weak German Retails Sales and
its bearish effect on the EUR, the rest of the day was a little more solid for the
EUR. The Euro-Zone economy saw two economic data releases yesterday with a much
lower figure in German Retail Sales compared to the forecast, which hurt the EUR,
but it seemed like there were even weaker currency counterparts in the market. The
GBP and CHF were very bearish yesterday which resulted in bullishness for the EUR
against the two currencies. The EUR/GBP cross was traded at a record high of the mid
0.81. Against the USD, the EUR lost strength as its economic releases were bearish
and the USD gained a lot of strength from the better than expected situation with
hurricane Gustav. Again, it seemed like the EUR has been trading on the same trend
as the Crude Oil prices against the USD, and as the Oil dropped yesterday, so did
the EUR by falling under 1.46.

Today should be a fairly quiet trading session for the EUR, as only one economic
release is expected from the Euro-Zone. The monthly PPI, which measures the change
in the price of finished goods and services sold by producers, is expected to rise
by a larger rate than last month, which should put the EUR back on a bullish trend.
It seems like the market in the world won't be too volatility as there are few major
economic releases expected today and look for the EUR to be strong on the map.

* JPY
JPY future Uncertain after Surprise Resignation of PM Fukuda.
Mixed trends were seen from the JPY in yesterday's trading session. Although the
USD/JPY combo did rise and show JPY bearishness, the JPY had some good momentum
against other currency counterparts. It seemed like no currency could stand against
the USD yesterday and it also seemed like every currency took apart the bearish GBP,
and so did the Yen. The volatile GBP/JPY cross traded under 194 yesterday. In late
New York trading, there was an economic release from Japan yearly Monetary Base rate
staying negative, but measuring at a better rate than last year. As the JPY sharing
similar behavior as the USD, the drop in Crude Oil prices helped the export-focused
Japanese economy gain further momentum.

In today's trading session, look for the JPY trends to be mostly based on its
currency counterparts' trading trends as no economic data is expected from Japan.
However BOJ Governor Masaaki Shirakawa is due to deliver a speech at the Nagoya
University in Nagoya. Besides Shirakawa's speech no other self made volatility
should be seen from the JPY as its behavior should be mixed based on the other major
currencies economic news.

* Oil
A Threat from the Sea.
The hurricane highlighted the fact that threats to U.S. energy security need not
come from abroad. With a quarter of the nation's crude oil production coming from
the Gulf's waters, the United States has drilled offshore to sustain domestic output
but made itself more vulnerable to the vagaries of the weather.

Crude oil prices tumbled yesterday as Gustav weakened more than expected and
appeared to have caused little damage in New Orleans and surrounding areas. Oil
prices hovered around $111 a barrel by the end of yesterday's trading session and
are trading near 108 today!
There was some disruption to oil supplies as oil companies shut down production and
evacuated facilities ahead of the storm. Altogether, about 2.4M barrels of refining
capacity had been halted, roughly 15% of the U.S. total. The Gulf Coast is home to
nearly half of U.S. refining capacity.

While a weaker-than-expected Gustav, which was downgraded to a tropical storm, is
loosing its power, traders turn their attention to other storms brewing in the
region.

Technical News
* EUR/USD
Yesterday the pair has fully resumed its downtrend, as it breached through the
1.4560 level. Currently, all oscillators on the 4 hour chart are floating within
bearish territories, another bearish session seems imminent. It appears that going
short would be preferable.

* GBP/USD
The cable is continuing to deliver coherent bearish signals, and is now traded
around the 1.7930 level. On the daily chart, the current price has dropped beneath
the Bollinger Bands lower boarder, suggesting that the pair should drop once more.
Going short might be the right choice today.

* USD/JPY
After a few days of falling prices, it seems that the pair has reached its bearish
peak at 107.61. As all oscillators on the 4 hour chart are pointing up, a bullish
correction might be impending. Going long with tight stops could be a good strategy.

* USD/CHF
The pair is continuing to fluctuate within a restricted price zone, and failed to
mark a significant breach. However, the Bollinger Bands on the daily chart are
tightening, indicating that a sharp price movement should take place. Traders should
wait for the breach and swing.

The Wild Card
* Gold
It seems that Gold has limited its bullish correction, and a bearish cross on the
daily chart's Slow stochastic suggests that Gold prices are once again looking
towards falling prices. This might give
forex traders an excellent opportunity to join the trend at a very early stage.

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