The euro depreciated versus the U.S. dollar today as the single currency tested bids around the US$ 1.2560 level and was capped around the $1.2685 level. The common currency is close to testing multi-month lows that could see the pair test March 2009 lows. Deepening eurozone credit concerns are impacting the common currency negatively, as are output concerns that suggest U.S. economic growth will continue to outpace EMU-16 economic growth. European Central Bank President Trichet today defended the ECB's decision this week to buy eurozone debt in the secondary market and said the ECB will sterilize its purchases through time deposits. ECB member Quaden called on banks today to maintain more and stronger capital. Many traders believe the ECB will keep its main interest rate target unchanged until late next year.
In U.S. news, data released today saw the April import price index climb 0.9% m/m and 11.1% y/y. Also, weekly initial jobless claims fell to 444,000 from 448,000 and continuing jobless claims rose to 4.627 million. Fed Vice Chairman Kohn and Minneapolis Fed President Kocherlakota defended the Fed's pledge to keep interest rates low for an "extended period." Regional Fed Presidents including Dallas's Fisher, St. Louis's Bullard, and Philadelphia's Plosser have recently suggested the pledge may inhibit the Fed's ability to manage medium-term inflation expectations. Fed Chairman Bernanke said a Senate proposal to divest swaps trading desks from commercial banks would result in less financial stability. Euro bids are cited around the US$ 1.2585 level.
¥/ CNY The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥92.60 level and was capped around the ¥93.65 level. Traders jumped back into yen today on renewed sovereign credit concerns. Many data were released in Japan overnight. First, the March current accou
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[/caption] POC 1140.25 for direction. 1147.25 for first resistance, 1154.25 is next level of resistance. Support on the 200MA, 1133.25 and 1st level support at 1129.75 then 1119.25. We have two open gaps on both sides of the markets range. 1156.25 and 1109.75. I would look for this to test to the 1155.25 area and the closing of the upper gap. If this occurs today at closing I would look for a move down in after hours, consolidation through the week and the next move down by Friday. If we return to 1175 area, I would look for consolidation. Unless of course if we have more upheaval in the euro zone. Iran is also coming to the forefront and with Obama's impotence in this area it leaves only military action available to Israel. This could be dangerous for the markets and the world. If the UN sanctions are weak, I am looking for the markets to consolidate. 
