USD/CHF

Hurricane Season Never Ends:  With the usual anemic economic calendar for the Swiss not lending any specific fundamental weight for traders to consider for the pair, dollar weakness has driven the pair lower.  Confidence in the dollar's strength has waned once again as the U.S. businesses, especially oil producers, hold their breathe as they await the damage that will be result with the landfall of the recently upgraded Category 5 Hurricane Rita.  Capital markets are still reeling from the effects of Hurricane Katrina and the recent resurgence in the dollar is once again called into question.

Swiss Citizens Head To The Polls:  Switzerland will continue to be soft against most currencies running up to the National Election that culminates on Friday.  The lead has been fiercely held by the conservative SVP party, led by Christoph Blocher, but that lead could be suspect after a  recent campaign slogan blamed black Africans for a majority of the economic woes of the country.  The business friendly party wrote on a poster, "the Swiss are increasingly the negroes," sparking cries of racism. The outcome of this election will have serious implications for the direction of the Swiss economy which has recently felt pangs of uncertainty with the stalemate outcome of the recent election for Germany, their largest trading partner.

Technically Speaking: The 580-pip surge the dollar staged against the swissie has come to an end, or at least a pause, after breaking the steep trend channel that has kept price action confined for the past two weeks.  Prices have currently found support at the 23.6% fib at 1.2683, but a break through this level would further be met with dollar bids at the 38.6% fib which coincides with the daily low on September 16 at 1.2597.

EUR/USD

French Data Shines Over Faltering EC Trade:  Market participants shook of a report that the Euro-zone current account deficit ballooned to 5.9 billion euros to instead focus their sights on French consumer spending.  The second largest economy for the union has had a tough time getting growth numbers back on the table, but the 5.7 percent annual rise in spending, the largest increase in five years, could set the economy back on track.  The euro community's outlook has muddied over the past week following the uncertain results in the German election.  Investors confidence have been shaken in Germany's near future with the even split in power between Schroeder and Merkel leaving important economic policies more difficult to institute.

Technically Speaking:  Dollar strength that has held out for since the beginning of the month seems to be finally sputtering out.   After turning nearly on a dime at 1.2100 two days ago, the pair made a feigned attempt to retest the level but cutting short at 1.2110.  Spot quickly launched off of the test level to a 1.2237 high only hours later, carrying the pair easily through the 23.6% fib.  The next obvious level for resistance will be the 38.2% fib, but the 50.0% fib at 1.2343 will be more stiff for technicians as it corresponds to highs that held out until the end of last month.  If dollar bidding overwhelms the pair, the 1.2100-level will once again come under scrutiny.

GBP/USD

The MPC Speaks: The minutes from the Monetary Policy Committee's September 7-8 meeting gave a clear read for traders what the nine members were considering when they unanimously voted to keep the benchmark-lending rate unchanged at 4.50%.  Recent inflation concerns due to higher crude prices dominated policy-makers worries for the near term.  Keeping the rate unchanged benefits investors looking to hold the currency pair for carry trade, but economic conditions leave the decision to stay the rate a tricky one.  Forecasts for the annual measure of inflation for August to grow to 2.4 percent suggests rates should be increased, but slowed economic growth in the second largest country in Europe lends itself to further cuts.  The minutes leave room for officials to loosen the rate at least two more times for the year.   An eventual cut, while diminishing the attractiveness of the carry trade, could prove the best medicine for an ailing economy.  Easing the lending rate would slowly bring back business investment while also lightening the load for consumers, which has suffered at the hands of huge public debt and hefty energy bills.

Technically Speaking:  Like the other two major movers for the day, the 500-pip trek the GBPUSD has made in the dollar's favor has seemed to have found a solid level for support at 1.7960.  A hefty 160-pip retracement has left multiple tests of 1.8125 as near resistance.  This level is likely to hold little overall significance when volatility picks back up after the open of the Asian and European markets, but a test of the 38.2% fib of the recent dollar swing will likely contain most of the euro exuberance that could be mustered for the session.  If dollar bidding can retake control of the pair, a move to the recent low at 1.7960 is likely to be a first stop before continuing further to lows set at the end of the August.

Richard Lee is a Currency Strategist at FXCM.