March Euros are expected to open lower. Overnight a report showed that inflation has fallen to its lowest level since 1999 while the Euro Zone jobless rate rose to a two-year high. These reports indicate that the European Central Bank has room to cut interest rates at its next meeting on February 5. Traders are selling the Euro in anticipation of at least a 50 basis point rate cut. Selling pressure actually started yesterday after George Soros said the Euro may not “survive” unless the European Union develops a global plan to combat the toxic debt issue.

The March Euro chart indicates a new main top has formed at 1.3321. Look for an acceleration to the downside if 1.2755 is violated.

March British Pounds are trading lower overnight after four days of gains. Earlier in the week, this market reversed its downtrend on the news that Barclay’s would not have to use government funding to stay in business. The better than expected news from Barclay’s helped provide relief to a market which had been attracting heavy selling pressure because of speculation the U.K. would nationalize some of its banks. Better than expected mortgage approvals could support the market today.

The charts indicate the trend remains down in the British Pound. The market has merely retraced a recent decline. This market needs to test the recent low to establish support.

Look for downside pressure on the March Canadian Dollar. Demand for commodity-linked currencies is waning as the global recession drives down commodity prices.

The March Japanese Yen is showing a slight rise overnight despite news that the recession in Japan is worsening. Factory orders are down and unemployment is up. There is a possible-double top forming in the Yen at 1.1492 to 1.1496. Look for the trend to turn down on a trade through 1.0964.

The March Swiss Franc is under pressure overnight despite news that the Swiss National Bank has called off its need to intervene. This news gave the market some support yesterday, but overnight demand for Dollars helped push the Swiss Franc down. A new main top has formed at .8844. Look for an acceleration to the downside if support at .8541 fails.