Although a tricky week for trading with Chinese on an extended bank holiday, PMI data & non farm payroll data on Friday trading opportunities do exist. However, with such high volatility it’s a question of getting in and getting out quickly, safely and profitably!

This week’s highlight obviously will be Friday’s employment situation report. Before then, traders will get their chances to tweak their forecasts with ADP employment on Wednesday and jobless claims Thursday. Current estimates puts the print just over an unimpressive +50k.

The market continues to wait for any positive news about Greece, again there was little produced over the weekend. The Greek cabinet approved new budget cuts, but the overall picture is one of a ‘failing program’. Greece’s GDP growth and budget deficit targets for 2011 and 2012 are significantly above estimates produced only three months ago. With the economy contracting close to 6% and protests increasing, the further budget and forecast downgrades likely challenge the credibility of Greece’s ability to meet even these new targets.

Greece is not the only challenge this week. Trichet Chairs his final rate policy meeting. Is it a surprise cut we can expect or the usual road sign policy change? European policy makers prefer to be more transparent, they do not even like surprising themselves! Ben gets to testify midweek, before the ‘holy grail’ of data, NFP is to be released on Friday. He is expected to emphasize the economic downside risks and that all policy options remain on the table. We can only guess what NFP will give us, for such a large country, it always surprises!

Roundup of what to expect this week plus summary of last week’s price action across related markets. As forex traders we need to expand our horizons by looking at related markets such as oil, gold, silver, bonds & equities so we can judge risk tolerance & see where the money is flowing.

Not one I would usually trade but again it was good not to have to focus on the euro!!

Very pleased with this trade and for once it wasn’t the eurodollar!

Forex market roundup & some suggested trades for this week. Since writing nice trade this morning on the audjpy which netted 90 pips which is pretty good for a Monday morning. You can find more details of this on my facebook page.

Merkel seems to burning the candle at both ends and doing everything in her power to prevent a Greek default. She is side stepping her own domestic supporters by moves of perception. Always be seen doing the correct thing, this is being fulfilled by her country’s own domestic banking due diligence of a Greek default occurring. The Chancellor, vocationally has to answer to a higher position of authority and that’s to the Euro-zone. Germany being the anointed leader, economically and politically, should supersede domestic affairs, the catch 22, its the local electorate that get you appointed. Any Greek exit from the single currency would unleash a ‘domino effect’ that must be avoided at all costs. The negative affect would be felt first hand by Merkel’s own local electorate. Its no wonder that she remains front and center, and the glue that can keep this all together. For how much longer?

The US$ is stronger in the O/N trading session. Currently, it is higher against 14 of the 16 most actively traded currencies in a ‘volatile’ trading session.

Round up of market sentiment which can only be described as febrile. Many saying Greek exit would be catastrophic for euro, eurozone as well as global economy but given lack of leadership & general paralysis it may be too late anyway.

Germany blaming Greece for the whole mess & everyone else running around like headless chickens. As article mentions the only viable solution is some kind of two tier euro. Meanwhile euro under pressure but a euro at 1.20 would certainly be a step in the right direction for Club Med countries.

It’s a thin market, liquidity at a premium, a holiday weekend and now we get a disastrous set of Euro-zone manufacturing data, a day ahead of the highly anticipated NFP report. The market has been slicing through the EUR like knife through butter already this morning, mostly on concern that Euro sovereign-debt crisis may worsen, curbing the demand for the currency and triggering some sizable stop losses that have helped to quicken the downward pace.

The IMF is helping to speed up the EUR downfall by its negative comments on European banks balance sheets. It does not help the currency that the Euro-finance ministers continue to struggle to agree on the details of possible securities for bailout loans for Greece. With these ministers continuing to put their national interests first, nothing will ever be decided.

Manufacturing activity in the Euro-zone fell back into contraction last month (PMI-49), ending a two-year run of growth as activity shrank in France and Italy, two of its biggest economies. The forward looking indicators are also looking suspect. Its expected that US ISM Manufacturing PMI will mark its first sub-50 reading in two-years later this morning. Look on the bright side, that print is still above the 42 levels that would signal recession!

The US$ is stronger in the O/N trading session. Currently, it is higher against 11 of the 16 most actively traded currencies in a ‘whippy’ trading session.

The sky’s been falling in so many times on the euro, difficult to get excited about its latest swoon. Tomorrow’s nfp may give us some clues as what FED may do & so give us some direction for the euro.

Bullish pennant pattern still in place on eurodollar despite today’s pullback.

The lack of a EUR selloff this morning, in the wake of a poor Euro industrial order print (-0.7%) and ifo data (108.7), seems to prove that the market is no mood to go heavily short ahead of Bernanke’s speech this Friday. Mind you, the ECB stepping in again to buy some Italian bonds, is making investors choice a tad easier. The market very soon will need to justify the reality as it appears to be getting ahead of ‘this’ announcement.

It seems that the BoJ has become another Cbank resigned to the fact that fighting the strength of its own domestic currency outright is too expensive, you only have to ask the SNB what that’s like. After another downgrade overnight by Moody’s (Aa3 to Aa2), the Japanese government has introduced new policy measures to assist exports. They will introduce a credit facility to fund procurement of energy and other resources from abroad. A credit facility to help Japanese companies engage in M&A abroad. The government will fund these facilities by releasing FX reserves ($100b) to JBIC to lend on to Japanese firms. With no intervention or new monetary ease mentioned will probably allow the JPY to appreciate that bit further, even more so if the SNB introduces a floor.

The US$ is weaker in the O/N trading session. Currently, it is lower against 8 of the 16 most actively traded currencies in a ‘whippy’ session.

Last week’s record euro shorts at odds with daily chart pattern on eurodollar which is showing series of higher lows.