Currencies: ­­­­ 10May Lack of additional negative news from Europe has markets consolidating and in some cases rebounding modestly. Most of the currency markets are close to unchanged. Aussie’s ability to rebound despite weak Chinese data is noteworthy.

Aussie: 10May Today’s material Aussie rally is impressive if for no other reason than it I occurring in the face of the crummy Chinese trade data. However, the rally merely rebounded the Aussie up to levels where it found modest support on the way down on Monday and Tuesday.

Yesterday’s pressuring of the –3 STD under the 21-day moving average has abated. It’s back to hugging the –2 STD. The technicals remain quite negative. Despite the bounce, its chart remains in the same pattern that has seen the Aussie fall relentlessly for 2 weeks.

We reiterate the comment we made regarding the technical measured move we are seeing as a possibility if the market plays out a bearish flag follow through.

Longer term, it appears the Aussie may be looking at another material move lower. There is the break below the bear-flag in chart action and the 200-day moving average has rolled negative.

If the break below off the bear-flag plays out, classic analysis calls for a move of approximately .0600 points lower from near the break out point of 1.0240-1.0250. This would target somewhere in the area of 0.9650. This is very near the lows from 11/22/2012.

All our technicals point to a clear negative bias that is accelerating.

Volatility remains in the low average range but is rising.

With indications of slowing economic activity in Asia, the Aussie is likely to remain under some pressure.

Seasonal Snapshot (cash): The 5-year pattern has a negative bias until 26May.

The 15&30yr patterns chop higher until 10May, then both fall out of bed throughout the rest of the month.