The US CPI data this morning was a tad firmer than expected but this has failed to materially factor into price action. Instead, the markets continue to focus on the broader global macro deterioration and ever declining US equity prices. The DJIA has traded back below the November trend lows with the break of the previous low also confirming the intense state of the bear market. Financials have been leading the way on more banking and housing concerns, while fears of more government bank takeovers have also weighed on sentiment. Interestingly enough, the Euro is better bid since the start of the US open, but the currency still remains offered on the day. Selling from large UK accounts was rumored to have been driving the Euro sales earlier on in the session. Meanwhile gold has been driving higher to briefly poke back above the $1000 level on more flight to safety buying. In other news, the US Treasury has confirmed the first meeting of the auto industry task force to be held today. In Latvia, the PM has resigned with the coalition government collapsing in the face of the intense economic deterioration.

Gbp/Chf - The market is in the process of carving out a major base with a confirmed higher low above the critical 1.5125 (29Dec low) trend lows at 1.5650 (21Jan low). A fresh higher appears to be in place at 1.6460 (12Feb low) and we look for today's break back above Thursday's high to now accelerate gains back towards and through key topside resistance which comes in by 1.7490 (10Feb high) over the coming days. Only back under 1.6460 negates.


Eur/Sek - Any setbacks in the cross rate have been well supported as reflected by Thursday's dip and subsequent sharp reversal. We now look for a break back above 11.1920(15Jan high) over the coming hours, with an acceleration on the break to expose the key life-time highs at 11.4080 (24Dec highs). A higher is now sought out by 10.8555 (19Feb low).




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