[Dan]

The cobwebs for trading seem a bit thicker today as the news flow is light, positions feel heavy and the set of data ahead looks important enough to cause real concern for traders. What seems clear is that the USD bounce back has come today with no great reason. The weekend barrage on health care by Obama wasn’t the headlines but the G20 and meetings surrounding is. So, too, the front page of the WSJ talks about the FOMC and slack in the economy. The power of the output gap in keeping deflation more important than inflation seems key to outlook on policy. But in the same paper there is the focus on the USD and its crisis. The fact that the USD is viewed in crisis even as its about where it began the year means something. Economics are assumed to be better than those cold days of January but the market bounce is being doubted and so too the USD. But the biggest story overnight was about the IMF and its gold sales. The yellow metal sold off appropriately even as they stated their first preference to sell their holdings to central banks. The weak hand, strong hand logic should help the bulls feel a bit more bold but won’t make the price action better as those heavy positions thirst for the liquidity of new buyers daily. So maybe the case today for the USD where sellers expect more sellers just because its in the newspaper and there is a “crisis.” Watching 1.4580 on the EUR for that to be questioned and 92.70 in JPY for the same.