EURUSD Continued talk about raising Euro rates keeps the currency bid. EU Summit starts on March 11to discuss how to make the EFSF a permanent feature and how to extend the loans to Greece. Ireland has a new government (would you blame them?) and off the post remarks talk tough about their loans from the ECB being too stringent. Rhetoric and posturing I think. US data turning better and there is talk FED starting to scale back or slow down QE2 operations. US equities made good gains of up to 1.6% on Friday giving some support to the dollar but not much. Discussions at the EU Summit won't be smooth one would suspect as Chancellor Merkel will be facing domestic pressure inttryi g to be benevolent leader to peripheral Euorpean states. I think EUR might see some difficult times ahead. Longs should look at getting out . 1.3570 to watch for a break down to 1.30. AUDUSD China thought to have bought AUD on the back of commodities purchases and investors switching from NZD after the devastating earthquake. AUDNZD should remain bid and possibly test 1.36. AUDUSD itself is bid up to high 1.01 today and it could again attempt the crucial 1.0250 this week or I fear it may retrace. Thinking of using DCI to reduce my longs now. Very short tenor. Break of 1.0250 bodes very well for AUD but I would like to see the reasons for the run up before being too bullish at this level. Asian investors need to be wary of the perceived expectations that their own central banks may want to see their own currencies appreciate agains the dollar, limiting the upside of this long AUD/Asians. AUDSGD still sees 1.31 as formidable resistance. GBPUSD Q4 GDP revised downwards to -0.6% but more hawkish comments makes it look imminent that BOE will like raise rates soon. UK need to be careful with their high inflation low growth (negative) and all signs point to a deflationary situation. I would sell GBOUSd as I mentioned last week just below 1.63 for 1.54 objective. USDCAD On way to 96. What more can we add with oil price presides supporting the Looney.
