Euro had a big sell off following Trichet's dovish comments, but it was just a flush-out of those who were betting on a hawkish statement; the dollar bears are still holding strong.
Euro: 1-month
Yen is probably the most difficult to trade, and I know this from personal experience (ouch). You just know that the usd/yen is about to go into a secular decline, but it fools you every time. Looking at the yen chart below (futures, so inverse of usd/yen), one can see that the massive rally on 6/26 turned out to fool everyone trading the breakout. I drew the two falling wedge lines on 7/2, and one can see that, while the falling wedge is still in tact, volatility/noise is pretty high. I mentioned in my previous post that we might see a return of reflation, and a clear indication of that would be if yen and stocks rallied at the same time, while carry trades like euro/yen and cad/yen skyrocket.
Yen futures: 1-month
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