Forex Signals: The EURUSD broke through last week's double top at $1.4338

S&P 500 (Sep 11) INTRADAY

Review The E-mini S&P 500 found itself stuck within the range of Monday?s session yesterday as the market experienced moves in both direction with the uncertainty surrounding the US debt ceiling continuing to offset the positive influence from corporate earnings and the better than expected Consumer Confidence data. Overnight the S&P rallied back to Monday?s high, which was also Friday?s close at 1340, which now sets a strong resistance level for the remainder of the week. A subsequent reversal took the S&P down to our entry point long at 1327 following rumours that the consumer confidence data would be worse than expected. The data actually was announced better than expected and this triggered a rally back to the pivot before weakness into the close resulted in the market finishing on the lows down 0.53% for the day at 1326.25

Strategy We have seen continued strong earnings reports overnight from Amazon and this morning from the likes of WellPoint and Dow Chemical. However, the S&P has been under pressure and we have seen the index slip just below yesterday?s low as the debt ceiling uncertainty continues to hamper any upside momentum. The debt ceiling deadline is closing in and the vote on the House plan by Boehner scheduled for today has been delayed. The Senate plan by Democrat Reid will go to vote today, but ultimately each plan needs to be passed in the opposing house to be relevant, which is unlikely. We are looking for a short entry today at the pivot level at 1330.50 as we feel the closer we get to the end of the week without an agreement in Washington then the more of a negative impact it will have on risk assets.

Alternative Any positive developments in Washington can trigger a strong rally as this uncertainty is removed from the market. A break above R1 at 1335.50 may lead to a break of key resistance at 1340.25

EUR/USD INTRADAY

Review Dollar weakness was the dominant theme in the currency markets yesterday as the greenback fell against all 16 major trading partners including a drop to record lows against the Swiss Franc. The debt ceiling negotiations showed no progress late on Monday and the situation became more polarised as the Democrats and Republicans set on different proposals to reduce the deficit. The EURUSD broke through last week?s double top at $1.4338 in the Asian session and then traded sideways despite a small blip on disappointing Spanish and Italian T-Bill auctions.

Strategy So far today we have seen generally higher than expected German CPIs which the Euro has completely dismissed as we have seen a drift lower from the overnight highs. German Fin Min Shauber says the Government is against a carte blanche for bond buys in the secondary market by the EFSF which is promoting a sense that last week?s agreement at the EU summit may not be the clear cut deal that was first thought. This has pushed the Euro down onto yesterday afternoon?s low of 1.4456. We continue to have an upside bias as we feel the US debt talks to remain in the dominant force. The market is fully expecting the debt ceiling to be raised but with the Democrats and Republicans still not on the same page on plans for deficit cuts. As such, downgrade risks are relatively high which will keep the dollar under pressure.

Alternative Scenario Positive news from Washington on the debt ceiling negotiations will lead to broad based USD strength and a break of 1.4437 will lead to a test of key support at 1.4324.

US 10Y T-Note (Sep 11) INTRADAY

Review T-notes have spent the week so far trading in a tight sideways range as uncertainty hangs over the market and investors remain non-committal in an environment that could see the rating of US debt downgraded. A key point however is that despite the lack of volume in US Treasuries both the 10 year and the 30 year bonds remain close to their 2011 highs which suggests the market as a whole still believes a debt deal will be done.

Strategy We too think the prospect of a US downgrade is too important for even Tea Party members not to come to an agreement. At the moment we have three way partisan split ? Democrats ? Republicans and the Tea Party which has made a common agreement more difficult than ever before. Today we will look to get short at the highs set both yesterday and on Monday, 124.200 with a stop at today?s R1 which also created the high on July 20th. We believe the action today will continue to be dominated by both the US debt ceiling and concerns over the Eurozone ? with the deterioration in Europe having the potential to continue to support T-Notes and worries over US debt adding weight, we believe T-Notes will remain range bound today and target one lies on the pivot level S1 and target two at yesterday?s low 123.250.

Alternative Scenario The Euro has pulled lower this morning as concern still prevails over the viability over the new agreement for Greece. Should further negative news weigh on risk sentiment T-Notes may make move towards last week?s range and the 125.000 psychological level.

Crude Oil (Sept 11) INTRADAY

Review Monday?s session saw the tightest range for crude since May. The market was obviously intent on putting this right yesterday as we saw a wild swing in both directions before ultimately finishing back where it started. Crude came under pressure right from the Nymex pit open and sold off $2 in a straight line. The move was accelerated by rumours that the US consumer confidence numbers would be worse than expected. Support was found below the $98 handle before the actually better than expected consumer number was announced. This triggered a full retracement and crude prices actually went on to make new highs breaking cleanly above $100 in a $3 reversal setting a new 6 week high at $100.62. Profit taking into the close meant crude settled at $99.59 up just 0.39% on the day. Strategy Bearish API oil inventory numbers overnight showed large builds in both Crude and Distillates. Also, the US debt ceiling saga continues to roll on without any obvious sign of a resolution. Both these factors have put pressure on Crude prices this morning and we have seen prices slip back below the $99 handle in what has been a subdued session so far. We are looking for a short entry today because of the two reasons mentioned above and in anticipation of further bearish inventory numbers due from the DOE at 15.30BST. We look for an entry short at the overnight high of $99.50

Alternative Scenario Bullish oil inventory numbers at 15.30BST may lead to a rally and a break above $100.17 may lead to a test of yesterday?s high at $100.62.