As of early Sunday evening, the two main risk currencies we have been observing continue to point to a counter-trend rally that has yet to roll over. Both the Aussie and Euro, two currencies that stock and commodity bulls want to see strong, are pushing higher this evening against the tradition safe-haven currencies: the Japanese Yen and U.S. Dollar. As you can see on the daily charts below, both rallies are coming within the context of overall downtrends. The declining 50 day moving average looms just above, though we could easily see a gap above it just to frustrate bears too eager to short. Counter-trend rallies in downtrends are notorious for shaking out as many shorts as possible (and sucking in as many bulls), before eventually turning back lower. Make no mistake, though, that the slope of the reference point (here, downward) is ultimately more important than whether price briefly rises back above it.
There is also an issue of whether both currencies have bottomed for good, and if we are at a major inflection point. Frankly, it is way too early to gauge that. We would need to see at least a major higher lower, likely followed by several weeks of basing out and then turning up for that scenario to even have a chance.
For now, though, I am letting this summer bounce run its course, willing to take some small trades here and there. However, this is yet to be a market where trading aggressively fits within the context of my style and philosophy.