London Session: Published September 21, 2007 7:57 AM

The London week is concluding on a climactic note, highlighted by a fresh all-time high in EURUSD� that proved to be very short-lived. The market has seen lighter volume today, which may have been an omen as to the action with which it corresponded. Trading conditions have been quite healthy, enabling market participants to profit from both sides of the market on the final day of the week. Ranges are normal and volatility has been manageable. The primary theme has been the following: the US Dollar broke to fresh lows, most notably versus both EUR and CAD, but sellers ran out of steam, triggering a large reversal in the recent trend.

Economic data was extremely limited in European trading, so market players went to work right on the open. The �USD lower� idea has been the path to profits, and London traders have been riding it to the bank. Within 30 minutes, the EURUSD broke above 1.4095 and ran through the figure. Shorts again scrambled to cover, pushing it to the 1.4120 zone. Simultaneously, USDCAD snapped to fresh lows at 0.9935 (estimated). This ended up being the ultimate lows in the US Dollar, at least for the time being. The USD bears were nowhere to be found. The market was caught on the same side of the trade - - - short US Dollars. This lack of additional USD sellers � as opposed to outright USD buyers � caused a �vacuum� below the market, as often occurs at tops/bottoms. Once EURUSD sellers came, the pair collapsed with ease as momentum longs were forced to liquidate.

The resulting price action caused EURUSD to trade back below 1.4100 and crack each short-term support level down to 1.4050. On the flip side, USDCAD bottomed and rocketed higher by nearly 100 pips. The pair now sits near parity, or 1.00. The USD rebound took USDJPY higher as well, as it added roughly 105 pips from low to high in London trading until it found resistance at 115.70. EURJPY ascended a full 75 pips and briefly traded north of 162.50. Lastly, EURGBP has been under severe pressure following a huge run that ended above 0.7000.

New York traders will continue to look at commodities and US equities. Economic data for the week�s final session is light.

Upcoming Economic Data Releases (New York Session)

0830 EDT July Canada Retail Sales, consensus: +0.0% (relevance: medium)

0830 EDT July Canada Retail Sales ex-Autos, consensus: +0.3% (relevance: medium)