Daily Briefing 110627

1.  Review.

I said “I will use this rally to enter short EURUSD at 1.4450/50 area; a daily close above. 1.4710/20 will invalidate this bearish view.” Nothing of this happened. “Closely watching CRB index to confirm risk aversion on positive EZ news. I will look at recent lows in stocks, commodities and JPY crosses to trigger further weakness.” I didn’t watched that closely, but further weakness is confirmed.”Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. That means short AUD, CAD and NZD against USD and JPY, from just above currents levels that offer attractive opportunities.” They remained closer to the previous lows and then no selling opportunities. “No buying for USDJPY, I think that 80.00 support holds.” It did. “Reverse CADJPY at 83, sell AUDJPY at 86” No chances for doing that.
Trades
None.

2.  Analysis.

"Fundamental analysis data"
German ZEW -9, -1.7 -3.1
EZ ZEW -6 9.5 13.6
German PMI 55 57 57.7
CNY HSBC 50.1 * 51.6
US New Homes sales 319k 311k 326k
Unemployment Claims 429k 414k 420k
German Ifo 114.5 113.6 114.2
US Core Orders 0.6% 1.0% 1.0%
"Fundamental analysis"
Incoming data and forecast continues to point to a weaker 2H 2011. Weak than expected EZ ZEW and PMI.
FCOM lowered 2011 GDP forecast down 0.3 to 2.7%-2.9%. UK reported weaker numbers.
Debate is the slowdown is temporary or not, we are inclined to a more substantial slowdown and the incapability of central bank to provide fresh stimulus.
QE3 wan not discussed, but I think it will come in autumn (and it will be announced end of August); FED will remain ho hold for an extended period (three meetings).
ECB is insisting on austerity measures and this poised further rate hikes.
RBA is on hold due to recent EZ concerns.
Approval of new cut by Greek Parliament the 30 will allow IMF to release the founding ; it seems that:
- people Is preparing to add funds to these bailout EU
- China is willing to support EZ
- IMF new chief will give markets some comfort
- PIG issues will move out of the spotlight but they will cap EUR rallies
- Money will flow to settle down Greece issue if necessary.
Anyway long term outlook is that Greece, with debt load increasing and negative growth, will be not able to repay its debt. Moody’s has placed Italy under review.
With EZ growth peaked before, EZ debt will burden EUR.
Worth to repeat this:
“Big money is shifting from Greece concerns and focusing on worrying about global growth slowing. This is O’Neil, Goldman Sachs chairman:
1. Asset manager are seriously negative on global growth
2. Japan is rebuilding after tsunami
3. The market underestimate the slowdown in China, to a 7% growth to contain inflation issues
4. Greece risk, including the problem for the banks, is small.”
Risk assets (stock and commodities) continue to slide lower this week.
Falling commodities prices could increase consumer demand, but high unemployment, austerity measures and exit of fiscal stimulus point to a major slowdown. This will bias risk assets further to the downside.
This week action confirmed that risk aversion remains.
Silver and Gold falling this week.
My big picture view is:
- commodities and risk asset are turning negative
- US growth is slowing
- global growth is slowing
Long term outlook:
The actual extreme in the bearish USD sentiment can be a reversal sign, and it is starting to apply now.

Id	Driver	Comments	Immanency
1	On-going global recovery	EZ slowing, US slowing, China slowing (risk aversion)	Next driver
2	Divergence in FED and BCE monetary policy	FED will be on hold for this year; BOE hikes in July TBD	No, wait for July
3	EZ break up	France and Germany supporting EUR	No
4	PIIGS	Greece bailout not done	Yes
5	QE3	Requires: - meaningful rise/(flat) in unemployment rate - sharp fall in inflations (expectations)	No
6	Commodity rise	Falling prices confirming slowdown	Moderate
7	US debt	Debt ceiling	August

Currency	Short term view	Long term view
USD	Bullish, extreme short and risk aversion	Bearish (2, 5, 7)
JPY	Bearish	Bearish
CHF	Bullish	Bullish (until bubble burst)
EUR	Bearish	(4)

"Technical analysis"
EURUSD hold the 1.41/0 the strong support at 1.40; if broken is a clear downtrend, if holds a range 1.40-1.46 A daily close above 1.4710/20 will signal a uptrend (unlikely event). Now 1.4180
USDJPY failed to break above 80.50 and tested again the 80 support, now at 80.42
AUDJPY capped in a 85.3-84.3 range, now at 84.34; 90 resistance looks very far at the moment. Next support is 83. EURJPY tested the solid base is 114, now 114.1
COT data suggest that is time for a reversal for the dollar. This can take many weeks and should be considered a medium term view. Commercials are again short.
COT AUD up 54k (-11k), OI 100k (-15k)
COT USD at 4.9k (-1k), OI 46k (-8k)
COT EUR at 29k (-31k), OI 190k (-0k)
COT JPY at 32k (+8k), OI 99k (+5k)
COT CHF at 11k (-2k), OI 51k (-3k)
German/Greece at 13.9% (-0.5%)
German/Spain at to 2.85% (+0.15%)
Bunds at 2.82%. (-0.1%)
JGB at 1.11% (-0.01%)

"Market dynamics”
The Greek saga is closed to a critical phase: the 30 will vote the 78 billion austerity package; if pass, it will probably trigger a EURUSD rally to 1.4450/45 area. I will use this rally to enter short EURUSD at 1.4450/50 area; a daily close above. 1.4710/20 will invalidate this bearish view. Key level to watch is the 1.41
Closely watching CRB index to confirm risk aversion on positive EZ news.
I will look at recent lows in stocks, commodities and JPY crosses to trigger further weakness.
I will use this USD weakness as a buying opportunity, looking if technical levels hold. That means short AUD, CAD and NZD against USD and JPY, from just above currents levels that offer attractive opportunities.
USDJPY flat; I think that 80.00 support holds.
Reverse CADJPY at 83, sell AUDJPY at 86
Key events:
Tuesday: US CB Consumer confidence
Wednesday: CAD Core CPI, US existing homes sales
Thursday: German retail sales, Unemployment claims, CAD GDP
Friday: JPY Tankan, CNY Manufacturing PMI, US ISM Manufacturing PMI

Median grid
EURUSD GRID 1.400 - 1.460, down bias
USDJPY GRID 80.00-84.00, neutral bias
AUDJPY GRID 82.00-90.00, neutral bias
USDCHF GRID 0.8225-0.8725, down bias

Prices and Risk on/off view

Risk Indicator(+/-)	Status	Comments
AUDJPY (off) EURJPY EURUSD USDCHF (off) USDJPY	84.3 (-0.7) 114.1 (-0.4) 1.4318 (-012) 0.833 (-0.0150) 80.42 (0.00)	Q2 Q1 Q1 Q1 Q1
US TYN (off)	2.86% (-0.10%)	Recent highs
Dollar Index (off)	76.21 (-0.01$)	Near May 76.44 top
US futures	1263 (-2$)	Q2
Gold Silver Oil	1501 (-38$) 34.2 (-1.5$) 91.1 (-1.2$)	Q4
VIX Gold/Oil Gold/Silver (off)	21.1 (+2.1) 16.4 (+1.0) 43.8 (+1.2)

Risk view is off:
- US 10YN at higher levels
- US index at 76
- Gold /Silver ratio strong
- most JPY crosses again around recent lows
- CHF close to historical highs versus EUR and USD

3.  Plan
Exit long CADJPY and USDJPY long with even a small profit.

EURUSD
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURJPY
Comment:< >

USDCHF
Comment:< >

CADJPY
Comment:< >

4.  Trades

Positions
USDJPY +2
EURUSD 0
USDCHF 0
AUDJPY +0
EURJPY 0
CADJPY +1

Weekly Briefing 110620

1.  Review.

I said “Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. That means short AUD, CAD and NZD against USD and JPY, from just above currents levels that offer attractive opportunities.
Very confused on; sell EURUSD at 1.445, if the double top there holds.” Good hint, but I was not able to do it. “No buying for USDJPY, I think that 80.00 support holds.” It did. “Reverse CADJPY at 83,” CADJPY was at 83 and I again did not respect my plan. Now is 81.66… “sell AUDJPY at 86” Shit, the same: AUDJPY was at 86 and I again did not respect my plan. Now is 85.00…
Trades
None. But I should have done…

2.  Analysis.

"Fundamental analysis data"
CNY CPI y/y 5.5% 5.5% 5.3%
US PPI m/m 0.2% 0.1% 0.8%
US CPI m/m 0.2% 0.2% 0.4%
US Capacity Utilization Rate 76.7% 77.1% 76.7%
US Industrial Production m/m 0.1% 0.3% 0.0%
Unemployment Claims 414k 421k 430k
Philly Fed -7.7 7.1 3.9
"Fundamental analysis"
The expected resolution of the Greek sage over the weekend with the approval of new cut by Greek Parliament will allow IMF to release the founding . German would not push for a voluntary 7-year debt extensions, that would have triggered a default. Wen Jiabao next week visit to EZ could give some support to EUR, pushing towards 1.4500 area.
Anyway long term outlook is that Greece, with debt load increasing and negative growth, will be not able to repay its debt. Moody’s has placed Italy under review.
With EZ growth peaked before, EZ debt will burden EUR.
Data show again slowdown in the US economy with US and all the developed economies. Political stalemate are also weight on the buck.
Big money is shifting from Greece concerns and focusing on worrying about global growth slowing. This is O’Neil, Goldman Sachs chairman:
1. Asset manager are seriously negative on global growth
2. Japan is rebuilding after tsunami
3. The market underestimate the slowdown in China, to a 7% growth to contain inflation issues
4. Greece risk, including the problem for the banks, is small.
Risk assets (stock and commodities) continue to slide lower.
Rising commodities prices could have slowed down the demand, suggesting that the slowdown is only temporary, but high unemployment, austerity measures and exit of fiscal stimulus point to a major slowdown.
Commodities weakness at the end of the week, even with positive Greece news, is another indicator about concerns over global growth. Next week action will be exceptionally telling about risk aversion and downside ahead if commodities will not rise on positive news out of Greece and Europe.
Silver and Gold were mixed this week.
My big picture view is:
- commodities and risk asset are turning negative
- US growth is slowing
- global growth is slowing
Long term outlook:
There could be a shift in the classical paradigm “risk-off: buy USD” if the US remains decoupled from global growth (assuming that global growth will regain pace)
The actual extreme in the bearish USD sentiment can be a reversal sign, and it is starting to apply now.

Id	Driver	Comments	Immanency
1	On-going global recovery	EZ slowing, US slowing, China slowing (risk aversion)	Next driver
2	Divergence in FED and BCE monetary policy	FED will be on hold for this year; BOE hikes in July	No, wait for July
3	EZ break up	France and Germany supporting EUR	No
4	PIIGS	Greece bailout not done Germany divergence with ECB	Yes
5	QE3	Requires: - meaningful rise/(flat) in unemployment rate and - sharp fall in inflations (expectations)	No
6	Commodity rise	Falling prices confirming slowdown	Moderate
7	US debt	Debt ceiling	August

Currency	Short term view	Long term view
USD	Bullish, extreme short and risk aversion	Bearish (2, 5, 7)
JPY	Bearish	Bearish
CHF	Bullish	Bullish (until bubble burst)
EUR	Bearish	(4)

"Technical analysis"
EURUSD hold the 1.40 the strong support at 1.40; if broken is a clear downtrend, if holds a range 1.40-1.46
A daily close above 1.4710/20 will signal a uptrend (unlikely event)
USDJPY failed to break above 81.00 and tested again the 80 support, now at 80.04
AUDJPY hold the 84.6 support, now at 85; 90 resistance looks very far at the moment. Next support is 83. EURJPY tested the solid base is 114, now 114.5
COT data suggest that is time for a reversal for the dollar. This can take many weeks and should be considered a medium term view. Commercials are again short.
COT AUD up 62k (+2k), OI 45k (+27k)
COT USD at 5.9k (+3k), OI 54k (-8k)
COT EUR at 50k (-1k), OI 190k (-100k)
COT JPY at 24k (+20k), OI 94k (+0k)
COT CHF at 13k (-3k), OI 54k (-20k)
German/Greece at 14.4% (+0.5%)
German/Spain at to 2.7% (+0.1%)
Bunds at 2.92%. (-0.04%)
JGB at 1.12% (-0.00%)

"Market dynamics”
Long term view:
- EUR staying up, depends how Greece will end up plus the stress test for banks. If nothing worse, I see 1.40
- USD is going down. We will have a rebound for risk off appetite (until the summer end)
- CHF, is going exponentially up because of picking up the JPY lost safe heaven status (new all times high versus the USD this week too); if risk on buy CHF, if risk off buy more CHF. CHF bubble will burst not immediate
- JPY, is going to go down (bad economic slump and lost safe heaven status); US bond bubble is not yet coming and this does not will favor this play; a non hike policy can slow down the play.
Next week view:
The expected resolution of the Greek saga will probably trigger a EURUSD rally. I will use this rally to enter short EURUSD at 1.4450/60 area; a daily close above 1.4710/20 will invalidate this bearish view.
Closely watching CRB index to confirm risk aversion on positive EZ news.
I will look at recent lows in stocks, commodities and JPY crosses to trigger further weakness.
Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. That means short AUD, CAD and NZD against USD and JPY, from just above currents levels that offer attractive opportunities.
No buying for USDJPY, I think that 80.00 support holds.

Reverse CADJPY at 83, sell AUDJPY at 86
Key events:
Tuesday: German and EZ ZEW
Wednesday: FCOM
Thursday: EZ PMI
Friday: German Ifo

Median grid
EURUSD GRID 1.400 - 1.460, up bias, grid change
USDJPY GRID 80.00-84.00, neutral bias
AUDJPY GRID 82.00-90.00, neutral bias
USDCHF GRID 0.8225-0.8725, down bias

Prices and Risk on/off view

Risk Indicator(+/-)	Status	Comments
AUDJPY (off) EURJPY EURUSD USDCHF (off)	85.0 (-1.4) 114.5 (-0.8) 1.430 (-005) 0.8484 (+0.006)	Q2 Q2 Q2
US TYN (off)	2.96% (-0.02%)	Recent highs
Dollar Index (off)	76.22 (+1.0$)	Near May 76.44 top
US futures	1265 (-3$)	Q2
Gold Silver Oil	1539.1 (+8$) 35.8 (+2$) 92.5 (-3.3$)	Q4
VIX Gold/Oil Gold/Silver (off)	18.85 (+1.0) 15.4 (+0.1) 42.7 (+0.2)

Risk view is off:
- US 10YN at higher levels
- US index rebounded at 76
- Gold /Silver ratio strong
- most JPY crosses again around recent lows
- CHF at new fresh historical highs versus EUR and USD

3.  Plan
Exit long CADJPY and USDJPY long with possible with a small profit or small losses.
Enter short EURUSD at 1.45 level
Enter short AUDJPY at 86.00
EURUSD
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURJPY
Comment:< >

USDCHF
Comment:< >

CADJPY
Comment:< >

4.  Trades

Positions
USDJPY +2
EURUSD 0
USDCHF 0
AUDJPY +0
EURJPY 0
CADJPY +1

A Pfennig for Your Thoughts 6/16/2011

* Dollar rallies. BIG TIME!

“For I told you that the markets wouldn't wait until the "actual end of June". And if you want to take advantage of the much cheaper prices of currencies and metals, then the next couple of months should be your cup o' tea. Because that's certainly what we have going on today, and most likely for the next couple of months, like I said.

And, you'll recall that I said this dollar strength would last until the Fed can't stand to see the stock market losses mounting like they will be, yields rising again on Treasuries, and of course Unemployment remaining a real pain in the neck for them. I know, I know, the Fed members have all said over and over again, that there will be no more stimulus. But, I'm sure they said the same thing after QE1. Once more stimulus is discovered, and I say "discovered", because I'm of the belief that the there's no way that the Fed wants to admit (when it happens that is) that they were wrong about not needing more stimulus. So, we could see more back door buying from the Primary Dealers of Treasuries. But, when it's discovered, I feel that the markets will reverse the dollar buying.”

Bootm line: dollar strong until there will be:
- stock market losses mounting
- yields rising again on Treasuries,
- Unemployment remaining high

Daily Briefing 110613

1.  Review.

I said “Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. EURUSD at 1.433, if the double top there holds.
USDJPY at 80.30, if 80.00 support holds. CADJPY should be a buy at these level because of expected rate increase, if 82.35 support holds” Pretty wrong analysis: USD stayed very week and JPY strengthened. USD had a rally to 1.467, but fell on 1.435 on Greece concerns.
Trades
None.

2.  Analysis.

"Fundamental analysis data"
German factory orders m/m 2.8% 2.1% -2.7%
CNY Trade Balance 13.1b 19.8b 11.4b
Unemployment Claims 427k 414k 426k
"Fundamental analysis"
Data show again slowdown in the US economy with US and all the developed economies. Political stalemate are also weight on the buck. There are two views:
1. PIMCO leading the view that the FED will be on hold for much longer, shorting the long bond.
2. Others thinking that sometime this year the economy will improve and FED will hike; Bernanke showed data pointing a recovery in H2.
Risk assets (stock and commodities) continue to slide lower.
Rising commodities prices could have slowed down the demand, suggesting that the slowdown is only temporary, but high unemployment, austerity measures and exit of fiscal stimulus point to a major slowdown.
Discussion about QE3 continues; Chuck is forecasting a QE3 in Q4.
JCT said “vigilant” meaning a hike in July (even if he said we will see next month), but Greece sovereign debt issues not settled down and revised inflation forecast for 2011/2012 weighted on EUR. Spain bonds yield spreads. ECB meeting on Thursday could signal a July rate hike.
Silver and Gold were mixed this week.
Some indicators are showing a risk off view:
- US 10YN at higher levels
- US index rebounded at 75
- Gold and Silver still strong
- most JPY crosses again around recent lows
- CHF at new fresh historical highs versus EUR and USD
I maintain this big picture view, where there is:
- commodities and risk asset less positive; but we should consider this sell off as assets repositioning and therefore a short term negative
- US growth is slowing; I believe that the USD will relief in the coming weeks because of the QE2 end, but it will be on pressure in the next months.
Long term outlook:
EUR depending on PIGS resolution, USD bearish, JPY bearish and CHF bullish.
There could be a shift in the classical paradigm “risk-off: buy USD” if the US remains decoupled from global growth (assuming that global growth will regain pace)
The actual extreme in the bearish USD sentiment can be a reversal sign, and it is starting to apply now.

Id	Driver	Comments	Immanency
1	On-going global recovery	EZ slowing, US slowing, China slowing (risk aversion)	Yes
2	Divergence in FED and BCE monetary policy	FED will be on hold for this year; BOE hikes in July	No, wait for July
3	EZ break up	France and Germany supporting EUR	No
4	PIIGS	Greece bailout not done Germany divergence with ECB	Yes
5	QE3	Requires: - meaningful rise/(flat) in unemployment rate and - sharp fall in inflations (expectations)	No
6	Commodity rise	Falling prices confirming slowdown	Moderate
7	US debt	Debt ceiling	August

Currency	Short term view	Long term view
USD	Bullish, extreme short and repositioning from risk aversion	Bearish (5, 7)
JPY	Bearish	Bearish
CHF	Bullish	Bullish (until bubble burst)
EUR	Hold	Neutral (around 1.37 mean)

"Technical analysis"
EURUSD stopped at the resistance is 1.47 area, now at 1.33. 1.46 support was easily broken; next support is 1.43. Strong support at 1.40; if broken is a clear downtrend, if holds a range 1.40-1.46
USDJPY tested again the 80 support, now at 80.31
AUDJPY testing 84.6 support, 85 support area; 90 resistance looks very farat the moment. Next support is 83. EURJPY has a solid base is 114, 116 support broken.
The Dollar index to 75.3
COT data suggest that is time for a reversal for the dollar. This can take many weeks and should be considered a medium term view. Commercials are again short.
COT AUD up 62k (+2k), OI 45k (+27k)
COT USD at 2.7k (-2k), OI 62k (+6k)
COT EUR at 51k (+29k), OI 296k (+25k)
COT JPY at 17k (+18k), OI 106k (+9k)
COT CHF at 16k (-6k), OI 74k (+9k)
German/Greece up to 13.7% (+0.9%)
German/Spain up to 2.5% (+0.4%)
Bunds at 2.96%. (-0.1%)
JGB at 1.14% (+0.00%)
TYN to 2.96% (-0.02%)
VIX to 18.85 (+1.0)
Gold/Oil to 15.4 (+0.1)

"Market dynamics”
Long term view:
- EUR staying up (EZ and global economic growth and interest rate hikes), depends how Greece will end up plus the stress test for banks. If nothing worse, I see 1.4 at three month (after QE2 ends)
- USD is going down. We can have a short term rebound for risk off appetite
- CHF, is going exponentially up because of picking up the JPY lost safe heaven status (new all times high versus the USD this week too); if risk on buy CHF, if risk off buy more CHF. CHF bubble will burst not immediate
- JPY, is going to go down (bad economic slump and lost safe heaven status); US bond bubble is not yet coming and this does not will favor this play; a non hike policy can slow down the play.
Next week view:
Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. That means short AUD, CAD and NZD against USD and JPY, from just above currents levels that offer attractive opportunities.
Very confused on; sell EURUSD at 1.445, if the double top there holds.
No buying for USDJPY, I think that 80.00 support holds.

Reverse CADJPY at 83, sell AUDJPY at 86
Key events:
Tuesday: CNY CPI y/y, USD PPI m/m, Retail sales m/m
Wednesday: US Core CPI m/m, EZ Industrial production m/m
Thursday: EZ CPI y/y, US Building permits
Friday: UoM

Median grid
EURUSD GRID 1.430 - 1.490, up bias, grid change
USDJPY GRID 80.00-84.00, neutral bias
AUDJPY GRID 82.00-90.00, neutral bias
USDCHF GRID 0.8225-0.8725, down bias

Prices
US at 1268, (-30, Q3),
GOLD to at 1531, (-10, Q4+)
Silver to at 36.1, (+0.1 Q4+)
Crude 98.8 (-2.2$)
EURUSD 1.435 (-0.035, Q1)
USDJPY 80.31 (+0.1, Q2)
AUDJPY 86.4 (+0.5 Q2)
EURJPY 115.2 (-2.0 Q4)

3.  Plan
Exit long CADJPY and USDJPY long with even a small profit, trying to avoid losses.

EURUSD
Comment:< >

USDJPY
Comment:< >

AUDJPY
Comment:< >

EURJPY
Comment:< >

USDCHF
Comment:< >

CADJPY
Comment:< >

4.  Trades

Positions
USDJPY +2
EURUSD 0
USDCHF 0
AUDJPY +0
EURJPY 0
CADJPY +1

Daily Briefing 110606

1.  Review.

I said “Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold. EURUSD at 1.433, if the double top there holds.
USDJPY at 80.30, if 80.00 support holds. CADJPY should be a buy at these level because of expected rate increase, if 82.35 support holds” Despite risk-off sentiment USD remained weak. Selling risk asset in remaining strength did not played well this week.
Trades
Exited AUDJPY and one USDJPY.

2.  Analysis.

"Fundamental analysis data"
EZ CPI y/y 2.7% 2.8% 2.8%
CNY PMI 52.0 51.6 52.9
US ISM PMI 53.5 58.1 60.4
US NFP change 54k 161k 232k

Unemployment rate 9.1% 9.0% 9.0%
Unemployment Claims 422k 416k 428k
"Fundamental analysis"
Data show again an increasing sluggishness especially in the US economy with US poor PMI and employment data. Political stalemate are also weight on the buck. Rumors of QE3
Greece sovereign debt issues is settled down. IMF inspection was positive. Spain bonds yield spreads. ECB meeting on Thursday could signal a July rate hike.
Silver and Gold were mixed this week.
All indicator, expect the USD weakness, are showing a risk off view:
- US 10YN at higher levels
- Gold and Silver strong
- most JPY crosses around recent lows, especially after NFP
- CHF at new fresh historical highs versus EUR and USD
I maintain this big picture view, where there is:
- commodities and risk asset less positive; but we should consider this sell off as assets repositioning and therefore a short term negative
- US growth is slowing; I believe that the USD will relief in the coming weeks because of the QE2 end, but it will be on pressure in the next months, because of a QE3 announcement.
Long term outlook has USD bearish, JPY bearish and CHF bullish.
The actual extreme in the bearish USD sentiment can be a reversal sign, and it is starting to apply now.

Driver	Comments	Immanency
On-going global recovery	EZ slowing, US mire slowing, China slowing: moderating pace	Yes, causing risk aversion
Divergence in FED and BCE monetary policy	FED will be on hold for this year; QE3 fears	Yes
EZ break up	France and Germany still determined to hold on	Moderate
PIIGS	Greece bailout done	Yes
QE2/QE3	QE3 talk; FED speaking	Yes
Commodity rise	No	No

Long term view	Short term view	Long term view
USD	Bullish, extreme short and repositioning from risk aversion	Bearish (QE3, fiscal problems)
JPY	Bearish	Bearish
CHF	Bullish	Bullish (until bubble burst)
EUR	Bullish to 1.5	Neutral (around 1.37 mean)

"Technical analysis"
EURUSD broke the resistance is 1.44 area, now at 1.465. If 1.46 is supported, next resistance is May high at 1.49
USDJPY after tested again the 80 support, now at 80.26
AUDJPY same level 86, has 85 as support to the 90 resistance. Next support is 83.
EURJPY has a solid base is 114, 116 test failed, basically flat week to week.
The Dollar index back to 73.8, support at 73.0.
COT data suggest that is time for a reversal for the dollar. This can take many weeks and should be considered a medium term view. We have to wait for a clear sign of rebound and commercial go again to negative.
COT AUD up 60k (+7k), OI 117k (+7k)
COT USD up to 4.7k (+2k), OI 55k (-6k)
COT EUR at 22k (+2k), OI 270k (+12k)
COT JPY at -1.6k (-10k), OI 95k (-5k)
COT CHF up 21k (+6k), OI 67k (+1k)
German/Greece up to 12.9.4% (-0.5%)
German/Spain up to 2.1% (-0.2%)
Bunds at 3.08%. (+0.2%)
JGB at 1.14% (+0.01%)
TYN to 2.98% (-0.02%)
VIX to 17.95 (+2.0)
Gold/Oil to 15.3 (+0.2)

"Market dynamics”
Long term view:
- EUR staying up (EZ and global economic growth and interest rate hikes), depends how Greece will end up plus the stress test for banks. If nothing worse, I see 1.4 at three month (after QE2 ends)
- USD is going down. We can have a short term rebound for risk off appetite
- CHF, is going exponentially up because of picking up the JPY lost safe heaven status (new all times high versus the USD this week too); if risk on buy CHF, if risk off buy more CHF. CHF bubble will burst not immediate
- JPY, is going to go down (bad economic slump and lost safe heaven status); US bond bubble is not yet coming and this does not will favor this play; a non hike policy can slow down the play.
Next week view:
Because of the risk off sentiment, where the dollar is late to get stronger, I will use this USD weakness as a buying opportunity, looking if technical levels hold.
EURUSD at 1.433, if the double top there holds.
USDJPY at 80.30, if 80.00 support holds.

CADJPY should be a buy at these level because of expected rate increase, if 82.35 support holds
Key events:
Tuesday: Chicago Consumer confidence
Wednesday: CNY manufacturing, US ADP
Thursday: CAD interest rate statement, US unemployment claims
Friday: NF Employment change, unemployment rate

Median grid
EURUSD GRID 1.410 - 1.460, up bias, grid change
USDJPY GRID 80.00-84.00, up bias
AUDJPY GRID 82.00-90.00, up bias
USDCHF GRID 0.8725-0.925, neutral bias

Prices
US at 1295, (-35, Q4),
GOLD to at 1541, (+15, Q4+)
Silver to at 36, (-2, Q4+)
Crude 100.4 (-0.2$)
EURUSD 1.465 (+0.035, Q1)
USDJPY 80.26 (-0.45, Q2)
AUDJPY 86.0 -0.5 Q2)
EURJPY 117.4 (+2.0 Q4)

3.  Plan
Review...

EURUSD
Comment:< >

USDJPY
Add a long at 80
Comment:< >

AUDJPY
Comment:< >

EURJPY
Comment:< >

USDCHF
Comment:< >

CADJPY
Add long at 82.25
Comment:< >

4.  Trades

Positions
USDJPY +1
EURUSD 0
USDCHF 0
AUDJPY +0
EURJPY 0
CADJPY +1