The FTSE closed down 31 points yesterday at 4,060 and tested the key level of 4,000. A nice down-trending resistance level has formed from the highs of the 6th January and it will be interesting to see if this resistance holds during the interaction with 4,000. The Dow opened the session with early strength but dropped from the 8,100 level and tested the lows at 7,940 which were reached yesterday afternoon. The index successfully tested these lows and embarked on a very bullish 300 points rally and eventually closed the day with a gain of 279 points. Today watch for a test of 8,350 for signs of resistance. A break above this level will lead to more strength ahead. Continue to watch 8,000 for additional tests. Today on the Forex the Canadian monthly core retail sales. The forecast is for a 1.5% reduction. It is the change in total value of retail sales (excluding automobiles). At 13:30 the US Building Permits and Unemployment Claims are due for release. These are both important figures and have a tendency to move the markets. The forecast for Building Permits is a slight reduction, down from 620,000 to 600,000. These annualised number of new residential permits issued during the previous month. If the actual is greater than the forecast then it’s good for the currency. The unemployment figure is the number of individuals who filed for unemployment insurance for the first time in the last week. If the actual is lower than the forecast then this is good for the currency. Anyone trading the Canadian Dollar may be interested in knowing that at 15:30 the Bank of Canada Monetary Policy Report is due to be released then at 16:25 the Governor of the Bank of Canada is due to make a speech.

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