FX

As you saw yesterday and most of you have seen before, the $USD is a big influence on risk assets, it has an inverse correlation meaning appreciation in the $USD tends to send stocks and other risk assets lower, since the Euro accounts for 50% of the US Dollar Index, the Euro is a good proxy for the normal correlation between the EUR/USD and the market (meaning the Euro and market generally move together).

the Euro is once again approaching a very psychologically significant area, $1.30 which it failed at twice this week on a head fake move sending it to the lows of the week, it appears it will fail again, however whether it breaks $1.30 before it does is difficult to say as it is so close now.

 The pair since yesterday's 4 m NY close, just under $1.30

 This is the second time this week, you may recall the first on the Greek news of a "fix".

 Here's a closer look.

 Thus far 3C on the EUR/USD has been very accurate, the longer term 15 min chart suggests the EUR/USD fails soon in this area, that's not good for the market.

 The 1 min chart shows a positive divergence in the pair between the large ES trade around midnight EDT and before the European open, that sent the Euro higher on the European open, but the divergence was in place at least an hour or two before the move. Since then it has been in line or confirmation at the lows, but failing to make higher highs so at a relative negative divergence.

On another FX front...

 My favorite leading currency is the $AUD which took a massive fall overnight, this is an excellent leading indicator, doing the exact opposite of the SPX here.

Longer term you can see how the $AUD held up at yesterday morning's lows, however has lost a lot of ground overnight.

Between yesterday's huge gold futures trade in the wide open, last night's ES trade and several other interesting events including the sudden large sell-off of Credit in the last minute of yesterday that equaled half of the average daily trading volume in one minute, there are definitely some strange events occurring.

Perhaps the strangest is the wide open nature of the orders, it's as if someone is trying to create an impression, no one who wants to own 11k ES contracts would ever place the order in a low volume overnight session and all at once.