We started the week with weak global equities as the US recession story continues to haunt investors. This has lead to continued risk aversion that's seen Yen firming against high yielders while interestingly enough the dollar for its part has come off lows for what some could say is a 'funnymental', but is it really?  

People cite Fridays payroll results where NFP's came out at -63K with previous figures also revised lower to -22K for two months of job losses. This should have been license to sell the dollar right? While I basically agree with that statement, we did fresh highs in Euro and knee-jerk reactions in other dollar pairs, we should also consider the technical picture. We have seen across-the-board sales for the greenback for sometime now that we've basically been overbought in Euro and company for sometime that fresh money was just not coming in. Add to that your usual weekend position squaring and you have a recipe for dollars bounce in the end.  

So the question for us now is what then is instore. This week sees high impact numbers roughly distributed among the majors and through out the week. Friday is worth special mention given inflation measures, consumer sentiment and a Bernanke appearance but other wise lets just take things from day to day. 

For Tuesday main numbers for us will be trade figures from both Canada and the US and as such will have me looking for activity in USDCAD. First things first consensus forecasts, for Canada median figures are at CAD 2.6 billion while the US for its part is looking at a -$59.5 billion read, both numbers are for January which should make for an interesting comparative.  

While it would be easy to say look you have a negative figure for the US we must consider that market is already inured with that. The mover here is likely to come from Canada where the stronger Loonie is likely to have some adverse impact. True the loonie is a commodity currency and commodities the world over are rising yet with its main trade partner to the south on the brink/or in recession a weaker than forecasted read is looking very likely. Chart wise to me this could be a recipe for us to see parity yet again though I will be looking at how market reacts to the 1.0011 area, 61.8 fib off the drop from January 20 highs.  

From a broader perspective we would like to note the on going dollar bounce is at the brink of those long awaited pullback in Euro and Cable while Aussy and Kiwi to me appear to have started its moved with the break of their respective support levels yesterday. Having said that, note that as we get closer and closer to next week dollar bashing should again go back into fashion with the FOMC set to meet Tuesday and another easing sought by the markets.