Wednesday 11/01/2012 8.00PM GMT 9.00PM CET

The Euro is oversold but as yet has failed to mount a good rally and its down again today and the Pound has also fallen hard – the dollar remains firm and we expect to go a lot higher.

Before we look at the news let's do a quick round up of trades.

Trade Summary

We banked 50% of our Euro, Aussie and Canadian Dollar profits last week and have been waiting to put them back in and need a down turn in momentum to do so. In the Euro, we missed selling into 1.28 as we thought the currency would rally more, so will hold our core position and wait for a bounce. In the Pound we were triggered short on the breakout below 1.54...

AUD: We are short into 1.040 and booked profit near recent lows expecting a rally – we have one now. We need to see a little more weakness to load up Support is 1.010 which is in line with the mid Bollinger Band and if this gives way expect it to cement the down trend.

GBP: We banked our shorts taken at 1.56 out, as we hit 1.54 support and were now short again on the break of this level but we will bank 50% now as we have such a good profit in a short period of time.

CAD: 99.00 key resistance on the upside. We remain short from 99.00 and looking to put our banked profit back in the market on a momentum down turn for a run down to 97.00.

EUR: We have banked 50% of our Euro short trade and see a rally back to 1.28 – 1.29 as a good selling opportunity on falling momentum with stops behind 1.30. We have been selling the Euro since the move up to 1.42, made a lot of profit and expect more to come.

JYP: We took the bounce up in the dollar due to it being oversold and were now waiting to go long again on a turn up above 77.00

Euro Zone – Fiscal Crisis Rumbles on Euro Going South in a Choppy Trade

The Euro is lower again today and its going a lot lower in a volatile trade which will see spikes to the upside be short, sharp and brief as the bearish fundamentals drive it lower. The situation in Euro zone is critical and I saw this on a news wire today and its totally correct

The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said” …."It is hard to believe the euro will survive if Italy does not make it through," he said, adding that while many saw Italy as too politically and economically important to be allowed to fail, "one might also argue that it is too big to rescue." (Reuters)

Everyone who knows economics can see Euro zone is facing disaster and all the talk of austerity and reform is for later and not for now – action is needed to restore confidence.

Not only is the fiscal crisis spreading and economic growth turning down in many nations, it now looks like Germany the powerhouse of the zone is slowing up too. Germany’s Federal Statistics Office said the economy probably shrank in the fourth quarter from the third, and the European Union cut euro area growth to 0.1 percent in the third quarter, from an earlier estimate of 0.2 percent.

Tomorrow debt will be back on the agenda as Spain and Italy will sell as much as 17 billion euros ($22 billion) in debt. Problems continue to mount for euro zone and while its oversold, any rallies are selling opportunities.

Risk Assets – Huge Falls are Coming Safe Haven Currencies Going Up

Risk assets are holding up well so far in 2012 but it won't last and we expect to see big falls in global equity markets this year.

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