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EUR/USD has rallied off yesterday’s low of 1.36 and now sits at 1.3709 (as of 8:20am). Short term rallies should be capped below 1.3900. If a continuation into the mid 1.38 area occurs, a slide in equities may be a confirmation to sell back to 1.3600 area. Remember that FOMC Statement is Wednesday, September 21st at 2:00pm.

SPX 500 sits about 9 points higher (as of 7:15am) than yesterday’s close. We also have the US Dollar sitting above the 9,760 area. If we have a reversal in equities, the USD may see additional gains turning resistance to support level if it can close above the 9,800 area. US Building Permits release is at 8:30am, it may be best to stay on the sidelines until the tone is set.

EUR/USD gapped down just over 100 pips on Sunday open (09-18-11). We have continued to decline and with no Greece bailout plan, we may be headed back towards to the 1.35 area. Be sure to utilize tools such as trailing stops, as this pair is being moved by lots of rumors.

Dollar has rallied against the Swiss as we expected, due to the SNB intervening. USD/CHF attempts to hold above its daily 200 day moving average and make another shot at the 0.8900 area. Buying on dips may be a low risk strategy due to SNB intervention, fear driving the Dollar higher, and positive rolls.

The SPX 500 sits about 20 points lower (as of 6:30am) from Friday’s close and the USD has rallied across the board against the major pairs. With no official bailout for Greece and days being numbered, the Euro may be expected for further declines.

As of 1:06pm the SPX 500 is up again and trying to close on a positive note for a fifth straight day. The sentiment may be set for a reversal come Monday as headlines have been driving this market up. We have a two day FOMC meeting (09/20/11 to 09/21/11) where we will be looking for commentary from QE3, operation twist, to the Euro zone crisis. Place trades with a strategy so that you don't end up getting burned like UBS.

Taking a look EUR/USD on a 1 Hour chart, we have continued to ascend. Rumors of a bailout for Greece have propped the Euro up for the short term as they have about one month before they run out of funding for the private sector and default on their debts. If taking a position in this pair be careful as rumors will move this pair.

We have opened about a 5 points higher on the SPX 500. If equities can close positively for 5 consecutive days we should remain below the August 31st high of 1,230.9; another resistance point that may come into play is the 50 day moving average at 1,224.1. Be sure to take caution with any news coming out of the Euro zone.

We have now approached the 1,200 area again for the third time. If the 1,200 area is broken, I would remain cautious unless there is some truly positive economic news to gain ground. Rumors out of Euro zone may cause spikes today as we remain in consolidation.

Commentary by Merkel and Sarkozy that Greece will not default has driven confidence in the EUR/USD. Recently off its low of 1.35 and now slightly below 1.38 (as of 7:20am), fear has temporarily subsided and we may see a medium term rally up to its 200 day moving average (1.40318). For the short term we have continued upward, but we may see a decline to low 1.37 area before another leg upwards to the 200 day moving average.