Thursday 3rd April

Yesterday Fed chairman Bernanke delivered an honest and on balance possibly upbeat assessment of the state of the US economy. Whilst admitting the US may briefly dip into recession his outlook was positive and the fact that the Fed has provided massive liquidity and stands ready to provide more has to be respected. His comments reinforced market views that the Fed will cut interest rates later this month.

The USD remained fairly steady throughout the day after an early rally in the Euro. Whilst the dollar's bearish outlook is intact its fall may be contained in the near term by various factors such as signs of traders returning to carry trades , Japanese buying of foreign assets at the start of the new business year and short covering of recent deep dollar selling.

One or two Trend changes on the model over the last 24 hours with the SARand doing particularly well. T/R discipline!