There is a heavy calendar of economics spread through the course of the next five days, and spread through most of the major economic regions. The heavy hitting releases really start from Tuesday with Canadian GDP numbers and Japan's infamous Tankan business survey and report, with Australia then feeding the market their Building Approval and Retail Sales numbers. Wednesday is a big day for the U.K. economy watchers with House Price Index data and PMI information that may either cap or add to the market sentiment that suddenly reversed on any bright spots that the pound had to offer.
U.S. data starts to really flow on Wednesday with the private sector ADP numbers, ISM manufacturing, and Pending Home Sales releases. Australia jumps in again on Wednesday evening with the Trade Balance numbers.
On Thursday the ECB reveal their interest rate decision, with the market now pricing in a fifty basis point cut to 1.0%, a massive move away from the concept set in February by Jean Claude Trichet who commented then that the bank would not be for major cuts in rates. This week also brings Friday's Non-farm payroll numbers, ISM service information, and to top it all a speech from Mr. Ben Bernanke, the head of the Fed.
The markets have pushed the dollar back towards the pre-FOMC announcement that the Fed would be buying Treasury notes, and as such back to major resistance on the dollar index again. The fact that the calendar is loaded, and that the G20 meeting is looming this weekend, we will very likely see a very strong set of regional trade patterns. More than at any time we will be looking for reversals in Asian, European, and the U.S. trade as each session gets their futures market underway.
It is unlikely that the market will allow the Fed to bulldoze a path to a weaker Usd without a lot of push-back, and as such the alert team is prepared to react to each session's momentum without necessarily expecting that momentum to carry forward into the upcoming session without being thoroughly tested. Reduced lot sizes and the banking of the first 20 pips with a percentage of the trade will be the order of the day.