EUR - Net comm. positioning on the verge of being greater than net large trader positioning. This alone will prove to be another headwind for a fundamentally and technically weak currency.
AUD - Reading reports of a slow-creeping sense of economic sobriety in the land down under. Consumer demand is eroding in Australia, and the Aussie housing market is a slow motion train wreck. The structure of the Aussie R.E. market isn't the same as the US market, but all speculative R.E. bubbles end the exact same way: in lots of tears and BK's. AUD still has lots of momentum behind it, but once this momo thrill is gone, the spill is going to be interesting.
JPY - The whipping boy of the Plaza Accord continues to be maligned by the Federal Reserve. Every time the BOJ tries to intervene in the yen market, the US happily obliges by digitally-creating more dollars to sop up yen. The Fed cares not that Japan has been in a decade's long depression...the Fed only cares about a slow, orderly erosion of the dollar's value. Any other outcome is deemded unacceptable. Yen uptrend will be one for the history books.
USD - Cheap/stable. Crises are the only things that seem to make the dollar rally now, as folks panic into cash. This is what the reserve currency of the world has been reduced to: a long-equity-vega-type instrument for unsophisticated investors. The next time the $US rallies 20%; the fear will be palpable.
Tradition - Chairman Bernanke told Ron Paul during last week's Fed dog/pony that the reason central banks hold gold is due mainly to "tradition." I almost choked when I heard the Chairman say that. Anyhow, tradition is making new 2011 highs (at $1599/oz. of tradition) as I write this. Also, the tradition/nostalgia spread is pretty wide, and is looking ripe for some compression.
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