Currency View

• An ???unsettling??? quiet pervades the Fx markets today?
• US dollar about to fall sharply next few days
• Euro 1.3410 barrier could be breached

The market is a little quiet really, except for the continued expected softness in the US dollar, and a bit of a Yen rally.

Continue to favour the USD/YEN to much lower levels. This could be one of those sharp drops which would continue to flow through the crosses as well, which is where we suffered a little yesterday. The Yen crosses are a tough call at this juncture. They could be about to have a savage sell off, or stabilize as the Yen continues higher against the US dollar at the same speed.

The Australian and New Zealand dollars continue to look strong, but there is a ???quietness??? about the market just now that is a little unsettling. I think we may be in for a very big move in currencies in the next few days. The main thrust of which is likely to be a lower US dollar, and perhaps some further yen strength as well. However a surprise US dollar bounce cannot be entirely ruled out until the Euro gets through that 1.3410 level. The early warning all is OK in the USD down-trend resumption scenario is 1.3375. The Euro remains bid on the day while 1.3315 holds. Immediate minor support 1.3335.