Currencies: 29MayWith this week's Employment report, there is some doubt as to how much directional action the FX markets will present. With all kinds of bad issues now coming forth from the Euro-zone, this morning's rally in risk-on currencies was somewhat surprising. However, continuing bad news tended to push the risk-off bias later in the morning. This bias has accumulated as the continuing crappy housing numbers from the US were joined by a horrendous Consumer Confidence miss. A worrisome observation we’re seeing again is one where the risks are seen as “well contained”, a constant comment for the last several years. As risks bubbles up, it is commented on as “manageable” or “nothing to worry about”, and then at some later point, it is seen as out of control in some way.

Aussie: 29May With indications of slowing economic activity in Asia, the Aussie is likely to remain under some pressure.
Today's failed breakout rally seems to have the Aussie back under some pressure. The early rally failed to make it to .9900 and the 5/22 high. If this failure holds, look for the Aussie to trade under .9800,and test the bear flag formation from last week. Support should be at about .9775, which is near today's low. It was also the support and resistance from the previous 6 sessions, acting as a high or low trading area. The next major support area should come in near .9705-.9710, where the market found traction from 5/23-5/25.
Resistance is seen at .9885, just above today's high, and near the 5/15 low and the 5/21 high.
Seasonal Snapshot (cash): The 5-year pattern’s upward bias extends until the end of July.
The 15&30yr patterns chop much higher until 20June, and then both fall out of bed throughout the rest of the month.