Now Yesterday was a TRADING DAY! What an active market we had, Draghi sent the euro soaring as he erased expectations for the ECB to cut rates, saying the decision was unanimous. Once the momentum got rolling, it was unstoppable with the euro rising more than 200 pips. S&P 500 closed at a 5 year high of 1472 up 0.8% on the day. To add fuel to the fire, the Japanese Prime Minister Abe says the BOJ is to target Unemployment, which sent the JPY tumbling against all pairs. The USD/JPY has taken out the 89 Figure and has 90 firmly in its sites, as I type the price action is just above the 89 handle. The Euro led whilst the JPY lagged yesterday so the 350 pip spike through the 200 week moving average is no surprise, this pair looks like an express train heading at the moon. Up 1800 pips in under 2 months, surely this has to correct soon? I would heavily advise against, there is no sign of any decent pullbacks, its a buy the dips trade at the moment.

What's in store for today?

The data calendar is very sparse today, with only an Italian Debt auction this morning.
Some of the levels to look out for on the EUR/USD are 1.325 for small bids, and further down to 1.321 where there is reported real money and sovereigns on the Ride hand Side of the Order book. Topside you have to look at the obvious psychological 1.33 level, which maybe tough to clear today considering the Euro's rally yesterday.
A pullback to 1.32 before going higher and taking out the 2012 highs could be a medium term target for the EUR/USD. A rally above 1.35 might be unsustainable with Europe's Macro outlook.
Moving onto Equities, 5 year highs on the S&P 500 and a close of 1472, the market has completely forgotten all the ongoing Fiscal Cliff problems and pushed higher, up 3.2% for this year already. Coming into Earning season's a pullback could be inevitable. Support on the downside near term can be seen at 1461 and 1450 whilst there may not be a lot of resistance until 1490, what will be the catalyst to bring us there? As I type the market has pulled back a few points with a quiet morning in prospect.

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