Thursday 08 April

Heavy bearish sentiment last night and yesterday.  The Dow's 72 point drop is the biggest in 6 weeks ...

Lots of event risk coming up very shortly with ECB and BoE rate decisions.  Not expecting anyone to hike anything but the market is watching the UK statement for mention of QE and will listen to Trichet's speech closely.  Greek misery continues with news that Greek banks are seeking additional support.

Early US employment data is the event for the start of the US session and then Fed members Duke, Tarillo, Kocherlata and Kohn are speaking this afternoon.  Mr Geithner is in China and news of states of emergencies in Bangkok and Kyrgyztan weighed heavy in the market overnight.

EUR and EUR crosses are all bearish, EURUSD has broken the much touted option barrier at 1.22 and Greek bonds are now toilet paper.  GBP is continuing bearish consolidation with cable is now in a wedge formation.   Sterling can consolidate sideways for a long time ... we could be doing this until the election.
The dollar continues its bullish run and crosses like USDCHF have had their best consecutive green run in six months, USDCAD has broken out of its descending channel but the breakout in gold and the strengthening yen shows the driver is risk aversion not great economic news.

I don't know anyone who is not bullish USDJPY and everyone is watching this pullback to get long.  This only means one thing to me, that this retracement will be deeper than everyone is expecting.   The dollar Yuan is at its lowest since July 08 on speculation China may let up and this is helping JPY strengthen.
The FX rumour mill is in overtime about a statement from Geithner or China imminent ...

I am still bearish Crude short term looking for a correction. The bearish evening star pattern on the daily is the first bearish pattern in a long time and crude can only rally at the same time as the dollar rallies and crude inventories build week after week for so long.

Update:  Canada is a bubble - I am shocked (not):   http://blogs.reuters.com/rolfe-winkler/2010/04/07/the-canada-bubble/

Cable short closed 50% @3R 1.5185 (+1.5R)

GBPJPY short closed 50% @3R  141.50 (+1.5R)
CRUDE short 85.50 stop 85.90 addition
NZDJPY short closed 25% @ 65.20 (+2.75R)
EURJPY short addition closed 25% @ 123.60 (+1.29R)
EURAUD short closed balance @ 1.4390 (+2.25R)
EURUSD short addition closed 1.3320 (+0.6) - ECB euphoria!
CABLE short stopped out balance 1.5235 (+0.5R)
GBPJPY closed balance 141.75 (+1.25R)
EURJPY addition closed balance 124.20 (+0.79R)
GBPUSD short 1.5270 stop 1.5310 again
GBPJPY short 142.30 stop 1.4260 again
EURUSD short 1.3560 stop 1.3580 - addition
GBPJPY stopped out (-1R)
AUDJPY stopped out (-1R)
NZDUSD balance stopped out 70.45 (+1R)
NZDJPY balance stopped out 66.00 (+1.41R)
EURUSD addition stopped out (-1R)
GBPUSD addition stopped out (-1R)

Open trades:

EURUSD short 1.35 stop 1.3530 - 1/2 

EURJPY short 127.20 stop 127.40 - 1/4 

CRUDE short 86.75 stop 87.05 - 1/4 + 85.50 stop 85.90

USDCAD long 1.00 stop 0.9965