Since my last post, the G20 moved a step further by allocating funds for developing countries. However a core issue demanded by China and some other members was not discussed -- namely a Global Reserve Currency. We have to wait until the next G20 meeting to find out what will happen in relation to that. Some experts believe that the USD, the euro or for that matter any other currency by itself is not sufficient to create confidence among all members.

Nineteen major US banks went through the stress tests and it seems that only $75 billion has to be raised in order to protect these banks. President Obama has created some confidence by taking this step.

Some of the recent macroeconomic data, including the non-farm payroll data -- which showed some slowing in the pace of job losses -- indecates that the recession is probably bottoming out. At least that is what the data coming out in the last few days suggests. However, though I have no data to support otherwise, reading the markets and instinctively speaking, I feel a lot more is yet to come.

In other words, I don’t see a bottom yet, and even if a bottom is in place, I expect the market will test the bottom once again.

Currently among currencies the best pairs offering a trade in my opinion are USD/JPY and the cross of GBP/YEN.

GBP/USD: I expect the GBP to start dropping again. I would expect 1.6280 as the maximum on the top side.

USD/CHF: I expect the USD/CHF to be a good buy at 1.790, though one could risk buying a bit earlier at current level of 1.0820-1.0880

EUR/USD: It is difficult to say right now how this will play out, but it could come down from the current level of 1.3910-1.4020

USD/JPY: The yen has failed to cross 105. This is the best trade for now. A sell anywhere between 95.50 and 96.50 for a target of 80 yen is a good trade.

GOLD: This is also difficult to analyze, but I would expect a downward move to around the 770 level.

OIL: Oil has been range-bound between $50 and $60 per barrel, but it has now crossed $60 and hence it is likely the range could shift higher.

USD/PLN: I expect it to move to zł.3.80-4.00

DJIA: The Dow Jones is toppish and a failure to go higher from current levels could bring it down to its previous lows again.

PLN: Having gone above 3.3 against the USD, and now even above 3.5, completely changes the scenario from a technical perspective. I would now expect the following scenario:

1. USD/PLN now has a major support at 3.5 and hence is likely to move higher to 4, then 4.2 and even 4.5 in the near term (a time frame of two months).

2. Fundamentally speaking, the CHF/PLN reaching 3.2 has put considerable stress on home loans, and heightens likelihood for defaults on home loans.

3. The sharp depreciation in the PLN has also affected businesses.

4. With the government doing some verbal intervention and defining the level at which it would intervene (if the EUR/PLN reaches 5); this only tells me that the situation is far more serious than it seems. Interventions have never worked in the long term. Hence, I would expect EUR/PLN to cross 5 in all likelihood.

5. It is also rumoured that Mr. Soros is shorting the PLN. If that is true, the signs are ominous for the PLN. However, exporters will benefit.

GBP/USD: I expect the GBP to move higher to around the 1.5 level for now.

EUR/USD: I expect EUR to move higher to 1.3/1.32

USD/JPY: This is much more difficult to analyze. If it holds at 98/100, we can see a sharp drop, otherwise it could go to 105 and even 110.

Gold continues to be a favourite and I see $890 as the price to buy again for a target of $1,050.