I like USD/CHF short tonight but there is some big news due from the U.S. tomorrow which you have to watch out for. If you are still in the market when 8:30 am rolls around trying to ride the pair down further then put a stop in close to the market in case the inflation figures that the Fed says they pay the most attention to come out. If your broker widens the spread to make more money and hit stops during the news I suggest you find another one. Same goes for the one who fills your stops 30 pips away during the news. This report is likely to show inflation above 2% year on year which is supposed to be the most the Fed will tolerate so the dollar may gain on the figure. Also released at 8:30 are spending and income which are likely to be weak. Spending minus energy and food I would expect to decline but it is included in the headline number so the market may make a knee jerk reaction. Bottom line is don’t get caught with your pants down if it does. By 10 am it should be safe to be short the dollar again when ISM manufacturing is released and another below 50 reading is recorded.

Another Fed meeting, another rate cut. This was predictable and the dollar derives no support from this cheap money policy to keep the big banks who are cash poor afloat. GDP came out a tic higher than expected and provided some moderate  support for the dollar but  the Fed once again ensured there would be no rally for the greenback. It languishes near all time lows and it is obvious now to most that it’s rally has stalled out. Gold is a good example of this since it was down on the day to it’s lowest price in three months just prior to the meeting then rallied $16 in an hour. This shows that there is no faith in the dollar or the fed anymore and with good reason too. Their ridiculous claim in the accompanying statement that inflation will moderate is pure nonsense. Obviously they need an economics lesson if they think lower rates will make inflation moderate. They are counting on screwing up the economy so bad that no one will make money and this in turn will lower inflation. If that is their idea of a soft landing I hate to think what a hard one would look like. Suffice it to say that I am not bullish on the dollar as long as the monkey shines at the Fed are allowed to continue unchecked.

My call here is to short JPY/USD and USD/CHF since both are ready to fall at least a penny in the next 24 hours. GBP/JPY is poised to fall a few hundred pips as well I just went short here as it cracked key Fibonacci support. There is a clear double top formation in place and the carry trade is about to reverse here.

My apologies for my lack of posts these last two weeks. Looking at the markets today it appears that the recovery of the dollar has stalled out at this point and if we see another weak reading of consumer confidence released tomorrow then this is all but guaranteed. USD/CHF and USD/JPY look to both start heading south again either tonight or tomorrow and gold looks to have found support also. There is still a general lack of confidence in the U.S. dollar mainly associated with the housing situation in the U.S. but also due to the antics of the Federal Reserve and the collapse of U.S. banks. Suffice to say the markets initial exuberance on hearing of the bonehead plan to give the Fed complete power has worn off and reality is kicking back in.

Sell GBP/USD now and get out before the rate decision. If the rate cut turns out to be 50 points get short again, if not expect it to rally afterwards.

Since it is already early Thursday I will just make this my comment for Thursday. Bernake opened his mouth and the dollar dropped surprise, surprise. I think even a blind man could have seen that coming. USD/JPY looks like its well on it’s way to going back below 100 and the dollar is worth less than the Swiss Franc once again. The Pound rallied nicely off of key support at $1.9650 last night and was helped out by a stronger than expected manufacturing report. Crude made fresh all time highs today due to Bernake’s dollar killing speech and a bullish inventory report which showed a draw of over 3 million barrels for the week. Gold also skyrocketed with all this going on and is riding oils coattails  at  this point. Tomorrows big news will be the Euro Area and the British interest rate decisions. I am not expecting a cut from the ECB and if they do cut it should shock the market into selling Euro. Meanwhile The Brits could very well cut rates if the housing market surveys are capturing the reality on the ground right now. A quarter point from the BOE is expected and should not hurt the pound much against the dollar but a half point would be devastating. If they do cut a half expect to see GBP/USD back to $1.9650 sometime tomorrow and GBP/JPY trying 192 before you know it. Actually since GBP/USD rallied today and just failed the last sessions high it is a short right now. Sine it was bought up today it is natural to expect it will sell before the announcement at which point it could very well rally. Unless of course they cut by 50 basis points which the market is not expecting.

GBP/USD took a hard hit from the poor Hailfax data and sits right above key support at $1.9650 right now. Don’t get caught long when more fundamental data comes out in a few hours from England. Industrial production looms large at 3:30 AM eastern time and there is a good chance for another strong downward move here before Bernake opens his mouth later this morning. IF $1.9650 is cracked a two penny move is to be expected to the downside. I wouldn’t short the pair unless that level is breached either before or after the news.

Sorry for not writing sooner I have been struggling with the burden of trying to figure out my liability if any to the federal income tax for 2007. AKA  illegal unapportioned direct tax,  Rockefeller’s brainchild or whatever pet name you prefer. Anyways turning to the markets we see housing continuing to deteriorate on both sides of the “pond” with the Halifax figure coming out weak again and pending home sales down almost 2% on the month in the U.S. It is obvious that the bloodletting in the real estate market is not close to being over yet. In Germany industrial production surged again surprising many, and it is notable how well German industry is coping with competition abroad and the strength of the euro. Maybe the weak dollar isn’t such a boone to manufacturing after all as our officials (I cant say elected because they are not) claim it is. Since the dollar has been getting weaker and manufacturing in the U.S. is diminishing while the euro is getting stronger and German production is soaring. Maybe this weak dollar is really all about it the re balancing of wealth in the world with our currency weakening and as a result our wealth shrinking. After all Americans would never accept a world government or North American Union if their pockets were stuffed full of valuable greenbacks.

The Japanese left rates unchanged again and this does not come as a surprise to the markets. There has been talk that some Japanese banks had significant exposure to the bad debt that was being marked up and resold between the banks in the U.S. and Europe and if these rumors are true it helps to explain the BOJ’s decision. Not to mention that Japanese exporters no doubt are not comfortable with USD/JPY at 100 and a rate hike now would almost certainly force the pair below that mark.  Especially considering the way “the fed” is slashing rates these days. The minutes of their last meeting released today said basically that things are worse than they expected and inflation is higher than they forecast. Two members voted against the huge rate cute and cited higher inflation as the reason. The minutes explain the thinking of “the fed” on their loans of treasuries to investment banks and also the crisis revolving around the bond insurers who back municipal bonds. So they basically decided to give these floundering brokers like Bear Sterns government debt so that they could pay their debts with it. These treasuries are how the Fed makes a lot of it’s money and it either buys them to lower rates or sells them to raise rates. Tomorrow Bernake speaks and you can expect him once again to talk down the dollar as much as possible.

OK now that I have vented my frustrations I will turn to actual trading. With the piss poor jobs report today the dollar is finishing the weak with a bearish tone. USD/JPY which already lost a penny and a half since yesterday is ready fall below 100 again. It is a very pretty looking short on a daily chart and I am suggesting you short it ASAP. Of course if you use a crappy broker like FXCM which does not permit you to trade after 4 pm EST you will have to wait until Sunday. However when Sunday rolls around do not hesitate to short the pair.

Well another day another worthless dollar. Today’s employment report was grim and was worse than expectations. The good news is that yesterday’s non manufacturing ISM was better than expected but again still the 50 reading which means and equal number of participants saw growth as saw decline. The dollar apparently received a big push this week from a hair brained scheme to have the Federal Reserve oversee all the financial and insurance regulators. This would be a complete disaster if it is implemented and shifts even more responsibility from our elected public servants to the network of private banks which have gotten us into this morass we currently find ourselves in. If we give these big banks even more power and literally make them above the law it will not be good for anyone. Except for the bankers and their shareholders of course. We need to be closing the Federal Reserve and making Congress coin money as they are mandated to by the Constitution. Not give more power to the institutions who have eroded the value of our money and as a consequence stolen the wealth of America over the last 100 years. However those morons who want to avoid a bloody nose today in favor of a decapitation tomorrow will probably get their way and instead of looking the problem straight in the eye today will defer. By allowing the people who have created the problem to expand it and make them above reproach as well in the process. The misplaced confidence in the Federal Reserve and the misconception that they are a federal agency like the SEC will likely be the downfall of America. This institution along with the criminal income tax hasbankrupted America and is bringing it to it’s knees now. So that the North American Union and eventual world government will be happily accepted by it’s citizens.