Hope you all booked some nice profits on either USD/JPY short or GBP/JPY short today. I still see potential for these two pairs to fall further tomorrow, especially if the Dow breaks it’s support in Europe of the US tomorrow. The US trade balance at 8:30 is likely to be huge and give traders another reason to short the dollar in general but against the yen in particular. GBP/JPY could easily fall another 300 pips from here by Friday afternoon, although Friday’s are known for being the day when people exit positions and trades fizzle out so use trailing stops and watch out for reversals.

USD/JPY short is a good trade right now and I am in it currently. GBP/JPY is also a good short the way the numbers came out today from the UK.

The big news tonight will be the Australian interest rate decision which is expected to remain unchanged. Before that the trade balance will be released and it is also important for AUD/USD, AUD/JPY and other crosses. I expect to see AUD/USD struggle with $.9470 prior to the announcement and then come tumbling down about a penny afterwards. Unless of course they actually raise the rate tonight. Otherwise it’s just another case of buying the rumor and selling the fact that they left rates unchanged.

My advice at this point in the day on a Friday is don’t trade. There is not much happening and you don’t want to be stuck in the market on Sunday when it opens at 2. Your broker probably doesn’t open until 5 or in the case of some bucket shops six. This means that there is at least three hours that the market is moving without your orders being executed. It is not likely that you will make a bug profit between 1 and 5 today and you will be powerless for 2 to 5 on Sunday so just stay away and enjoy your weekend.

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.

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.

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.

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.

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.

I hope many of you were able to take a nice profit on my short USD/CAD recommendation today. It came down and hit the one support level I failed to mention yesterday at 1.0130. The bad news is I forget to  list every support level, the good news is there will soon be a whole technical analysis page or pages created on the site which will list all the support levels for you.  GBP/USD ran into a wall today when it hit the 50% Fibonacci retracement on the move from $1.93 to $2.04. at $1.9898 and looks like it wants to head back down to the Fibonacci at $1.9782 sometime tomorrow morning but I must warn you that if you try to jump in now and ride it down it is wise to get out BEFORE the big ISM report tomorrow.