Sterling is continuing to weaken on the crosses and those looking to buy USD might do better selling cable rallies rather than taking on the might of China in the EUR/USD market. AUD/USD also continues to drift lower and I feel we are headed back towards .7700 at least, now that the market is stabilising below .8000. USD/JPY is currently at the mercy of GBP/JPY and other cross flows. If EUR/JPY trades below 131.50, I will exit my long strategy and go lick my wounds.
The big event risk is now the G8 meeting although I do not expect any significant announcements, some volatility is bound to ensue.
Good luck today.
