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Euro is above the 1.30 level against the US dollar in forex trading on the currency market today. Indeed, risk appetite has returned to the FX market, after the euro has had some disappointments recently.

Now the euro has bounced above a psychologically important level, and there are hopes that the Greek debt situation will soon be resolved, and that the eurozone will be able to move forward.

An EU embargo on Iranian oil hasn’t caused the euro to falter so far. However, there are some weaknesses that could result in a lower euro moving forward. The Greek deal is far from done, and there are other sovereign debt worries. Plus, unless the eurozone economy shows some solid improvement, the euro could easily sink lower. 

EUR/USDThe Eurozone sovereign debt crisis is set to continue to dominate the price action this week after the Troika announced that it now expectd that Greek debt will peak at 186% of GDP in 2013 and decline only to 152% of GDP by end-2020 and to 130% of GDP by end-2030. As a result, it now looks increasingly likely that the initially proposed 21% PSI level will be revised sharply higher. According to latest reports, officials are considering options with writedowns of as much as 50%, while others have called for upfront bond exchanges into either AAA rated bonds from the EFSF or new 30-year Greek government debt. Talks over the weekend also centred on the EFSF, which given the opposition by the ECB and Germany is unlikely to get a banking license which the French government has been calling for since the day one. Finally, the latest CFTC report shows that speculators increased their net short EUR position to 77,720 contracts from net shorts of 73,795 the previous week, while the value of the USD’s net long position rose to USD 14.86bln in the week ended Oct. Full article…

But for your doubters, let’s take a closer look.

The first view is the “market memory” or “lookback” – just two words that mean the same thing that I use to describe when I my chart view includes the complete amount of data that I feel reflects the

1) trend 2) important highs and lows 3) relevant last major moves (rallies and sell-offs)

The key words are psychologically relevant when it comes to this view because at some point in my analysis I will view the pair from within its market memory. For the daily chart, it’s one year.

Notice that since it’s early January, I have included data back to late December 2010. The view won’t always be exactly one-year, but get as close as you can. The angle of the 34EMA Wave in this view is what I use to determine the market phase. Here it’s a “twelve to two o’clock angle”.

The uptrend is VALID only as long as the 34EMA Wave angle remains at “twelve to two o’clock” and price action is supported above the 34 period EMA low. IF the Wave flattens out, the market trend will have shifted.

Full article…

BUSINESS as usual ends at the gates of Ray Dalio’s Bridgewater Associates. Inside the $125 billion hedge fund’s Westport, Connecticut-based headquarters, radically different behavior at an individual and corporate level rarely ceases to astonish. Cameras rest in every cranny; almost all meetings are recorded. Meetings are nasty, brutish, and long. One individual casts a long shadow over every decision, large or small. The question of the day is—always—What Would Ray Do?

This question is now asked outside Westport as well. Dalio has willed into existence an asset manager that has changed the industry, radically altering the way assets are managed for the world’s most sophisticated institutional investors. From client service to asset allocation to economic research to client communication to returning capital, Bridgewater has set a new bar. It is a safe bet to assume that the asset managers that dominate the institutional scene going forward are going to resemble Bridgewater more than the behemoth asset-gatherers that have reigned since the passage of the Employee Retirement Income Security Act—ERISA—almost four decades ago.

It is all too reminiscent of another company on the opposite end of America—Apple.

Full article…

***Economic Data***
– (PH) Philippines Nov Overseas Remittances: $1.8B v $1.8B prior; Y/Y: 10.6 v 6.2% prior
– (EU) ECB: €2.4B borrowed in Overnight Loan Facility vs €1.5B prior; €493.3B (fresh record highs) parked in Deposit Facility vs. €489.9B prior
– (IN) India Dec Monthly Wholesale Prices Y/Y: 7.5% v 7.4%e
– (DE) Germany Dec Wholesale Price Index M/M: 0.0% v 0.7% prior; Y/Y: 3.0% v 4.9% prior
– (CZ) Czech Nov Export Price Index Y/Y: 5.8% v 4.5% prior; Y/Y: 7.6% v 6.9% prior
– (CZ) Czech Dec PPI Industrial M/M: 0.1% v 0.2%e; Y/Y: 4.6 v 4.7%e
– (DK) Denmark Dec Wholesale Prices M/M: 0.1 v 0.1% prior; Y/Y: 4.1% v 5.2% prior
– (TR) Turkey Dec Consumer Confidence: 92.0 v 91.0 prior
– (TR) Turkey Oct Unemployment Rate: 9.1% v 8.8% prior
– (CH) Swiss Dec Producer & Import Prices M/M: +0.3% v -0.1%e; Y/Y: -2.3% v -2.8%e
– (AT) Austria Dec Consumer Price Index M/M: 0.2% v 0.1% prior. Y/Y: 3.2% v 3.6% prior
– (NO) Norway Dec Trade Balance (NOK): 41.2B v 35.5B prior
– (IT) Italy Dec Final CPI (NIC incl. Full article…

“Localities have chopped 535,000 positions since September 2008…” USA Today

Cuts in government services became conspicuous after the 2007-2009 financial crisis.

The first edition of Robert Prechter’s Conquer the Crash saw this coming, even though the book published nearly a decade ago:

“Don’t expect government services to remain at their current levels…The tax receipts that pay for roads, police and jails, fire departments, trash pickup, emergency monitoring, water systems and so on will fall to such low levels that services will be restricted.”

Households throughout Massachusetts know exactly what Prechter is talking about.

In a boston.com article , the president of the Massachusetts Taxpayers Association said this about the state’s municipalities: “Revenues have been virtually flat, while their costs have grown, which has meant cuts in schools, public safety, and other basic services for most cities and towns.’’

The same article reports that “Worcester has cut about 450 municipal jobs, including approximately 60 police officers, 60 firefighters, and 100 public works employees…”

Detroit’s WWJ-TV reports “Budget deficits and declining personnel are the major forces behind the Detroit Police Department’s decision to end free funeral escorts.”

November 9 saw the biggest municipal bankruptcy in U.S.

Full article…