• EUR: The ECB statement shouldn’t have been that much of a surprise but the short-term ‘herd’ nature of current markets means that traders forget influencing factors which happened only weeks ago in favour of the current short-term trend. Now everyone is turning bearish on the EUR and whilst we will surely see some profit taking on longer-term trends like EUR/JPY, EUR/AUD and EUR/CAD, I think EUR/USD traders need to be careful and pick the correct entry level (1.3650 is still the vital pivot in my view).
  • GBP: The fact that cable pulled up shy of 1.70 and that the market is certainly still long of GBP are very relevant factors here. This week we have the BoE inflation report on Wednesday and I expect to see more GBP selling as profits are taken off the table. EUR/GBP is holding grimly onto support levels near .8160. I’d play a 1.6650/1.6925 cable range this week with a short-term bearish bias (although the long-term bullish view is still intact).
  • JPY: Still in the too-hard basket for me. The market is still quite short albeit at much reduced levels. USD/JPY is likely to trade in tight ranges but I think we may see some of the Yen crosses like GBP/JPY in particular come under short-term pressure.
  • AUD: Budget day tomorrow in Australia and we should see some increased volatility. Solid resistance at .9425 is still proving tough to crack. I’m not sure on the AUD/USD in the short-term but will stick with my very strong buy-big-dip bias towards .9150.
  • CAD: Real money shorts have been exiting the market meaning that speculative shorts have now increased despite the rise in the CAD. USD/CAD bounced after poor Canadian jobs data but that is soon forgotten and positioning levels will become the important factor. I still think long CAD is the most obvious trade in the market.
  • USD: The long-term bear trend is still very firmly in place and will remain so until the Fed can manoeuvre it’s way out of the printing room. The Treasury market is giving macro leads here.  The USD should find short-term support against the JPY, EUR and GBP but will struggle on any rallies against the commodity bloc.