Gold and oil are holding a base, the German Dax just opened at decade lows, S&P Futures are off over 1.5%; all indicating that the dollar may still hold its value as lower equities force the buying of US based Treasuries and bonds. A massive week of data awaits, it is an absolutely huge week ahead, and it starts with UK Manufacture at 04:30, Cad GDP at 08:30 and ISM at 10:00. There are four rate decisions this week, starting with Aussie tonight, and ending with Non-Farm at the end of the week.

All-in-all still Usd positives around, but the economics may test that this week. The majors are holding the Asian session lows, and looking a little lost right now. The next leg lower that comes on Usd strength will send the major pairs to 2008 lows, and that averages out between 5-10% of movement on each. That would also send the dollar index to three year highs, something that will impede the U.S. trade imbalance, and possibly instigate the question of how easily it will be for overseas buyers of U.S. debt to ignore an increasing Usd cost just to get into the relative safety of U.S. debt. Maybe taking a chance on the regional equity market will start to offer better odds than buying an expensive dollar in the game of Risk to Reward that is being played out as the global financial market re-aligns itself.

The Usd finished February where it started and in doing so managed to hold off the advances of the major pairs quite easily. The weekly charts are holding the lows on the major pairs, and are revealing very tight trading channels. The consolidation looks to have run its course in regard to average length of time that pairs have previously moved sideways, but in light of the global financial market being re-built normality may have new rules being written. If the break out of the channels comes it will draw a lot of attention, with this week potentially the strongest we have seen recently in regard to potential economic release moves.

There are four main interest rate decisions, from Australia, Canada, the U.K., and the Euro-zone. All of which have the potential to easily move each region's currency value. The race to reach the bottom of the global business cycle may have started to show signs of finding some strong contenders, and although his week's CPI, GDP, Retail Sales, Rate Decisions, and Employment Data may not reveal the winner as the region that shows economic growth first, it may allow currency desks to feel comfortable in actually holding a position for longer than one part of one session that has been the market norm for the best part of six months.

We are looking at the equity market reaction to a poor week of trade previously, and looking to test the resolve of Usd buyers on the days that equities do move higher. In recent trade all we have seen is the up and down reaction in forex to the global market buying and selling the dollar as a risk aversion play. Equities up equates to major pair rallies, equities down equates to major pair reversals; a pattern that looked to be getting challenged just two weeks ago, but evaporated as quickly as it came.

The four hour charts are failing in their attempts by the majors to break the dollar index strangle-hold, with the last few attempts at these levels leading to sustained periods of dollar buying. As such we are quite prepared to trade either side of the Usd, and quite prepared to get in, get out, and look again. If the majors do make a long break we will be looking for the aussie to possibly make ground on the strength of an economy that may show the first signs of recovery, backed by gold and oil prices holding higher ground.