Further profit taking accelerates unwinding of carry trades

At time of writing,

the Aussie dollar fell from this week high of 1.10104 to 1.06,
The Euro from 1.4939 to 1.4562.

Similarly, commodities like Gold from US$ 1576 to US$ 1476,
Crude Oil from US$ 114.80 to 100.50.
(Technically, there is a Head and Shoulder formation in the ALL of the above Daily charts!)

As a result, the USD Index rose from a Year 2011 low of 72.86 to 74.20
(Technically, there is an INVERSE Head and Shoulder formation in the above Daily charts!)

The SURPRISE came when

• The Euro plunge as a result of a LESS hawkish tone from J C Trichet in his delivery after it's Monetary Policy Meeting.
• Another increase (the fourth) in Margin requirement for Silver triggered the plunge dragging precious metals lower.
• Jump in inital jobless claim ( indicating lower global demand) trigeered a sell of in Crude Oil to a near low of US$ 100 per barrel.

In conclusion, there's indication of global mindset to unwind carry trades, that is, seeking lesser risk from high yielding assets to lower risk assets, namely the US dollar and Japanese Yen.

We will have to wait for ONE more indication, that is, the US Non Farm Payroll data, due Singapore time, 2030 pm, Friday before having a clearer picture where equity markets are heading in the medium term.