Pre-Market Futures

Good morning,

Well it seems some of the overnight fence sitting was temporarily resolved when about 4 a.m. the USD/JPY pair made a move to the upside, even if it looks a little precarious right now...

USD/JPY finally makes a decision around 4 a.m. and moves to the upside, however there's a 3C negative divergence in place right now.

The other carry pair, EUR/JPY followed around 4:30 a.m., but looks even more precarious. 

EUR/USD tentatively went along with the whole risk on (sort of) theme, but it too doesn't look too sure and that may be because Angela Merkel had to depend on the  German opposition parties to get votes for the Cyprus Rescue package (while her own CDU  party left her high and dry which doesn't look good for her re-election chances in September).

Bloomberg summarizes:

• Chancellor Merkel gained 303 votes from her own coalition lawmakers in a vote today to approve aid for Cyprus, fewer than needed to secure their own simple majority in the 620-seat lower house of parliament, the chamber’s press office said in an e-mailed statement.
• 220 CDU-CSU lawmakers backed the aid program of EU9b while 10 rejected the packge; 83 FDP lawmakers backed the move and 8 rejected it, meaning Merkel depended on opposition parties to get the package approved

The other European "Not so good" headline is that Italy has failed to elect their compromise President in the first ballot today.

As a result, the EUR/USD looks like this....

Going along tentatively overnight, but since the recent headlines out of Germany and Italy, the pair has a negative divergence making its failure look like "only a matter of time", which is not supportive of the market, especially if the other two carry pairs above fail as well.

As a result, here are the Index futures looking as you might expect given the stability of the pairs that lifted them...

 ES w/ a positive divergence moved at 4 a.m., looking tentative at the least...

 NQ just followed along with the group about 4:15 a.m., it has a small leading negative intraday divergence

And TF moving around 4:30 a.m. with a leading negative divergence in pre-market.

I'll follow up with a closer look at the component single currency futures that make up the above pairs, but the market looks to be on shaky ground this morning, it seems like real fence sitting rather than some manipulation.