Finally, after months and months of unprecedented spending, Federal Reserve Chairman Ben Bernanke is concerned about budget deficit. He expressed his opinion during his periodical presentation before the House Budget Committee. In his prepared statement he urged both lawmakers and Obama administration to “start plotting a strategy to curb deficit”.  Great, this means, that nobody even began to lay ground work for closing, and hopefully eliminating, budgetary gap. No, not a gap, the great canyon.  He believes that investors world wide could eventually loose confidence in USA.
I think this is the first time that Mr. Chairman is advocating fiscal prudence and it took me by surprise. Until now he was happily accommodating politicians in spending and even advocating the never ending bailouts. I wonder if he is speaking his mind, or is playing to sentiments of general public, which is fed up with current state of affairs? Or perhaps, this is a pose for international investors and policy makers, who are increasingly uneasy about our monetary issues. Just recently, even normally very respectful and reserved German Chancellor Angela Merkel, criticised  Fed and central banks in Europe for their actions, claiming they could lead to serious problems in the future. Only yesterday Treasury Secretary Geithner was laughed out by Chinese audience when he stated that Chinese assets are in USA are safe. Embarrassing, I’d say.
It is great that our authorities noticed problems related to raking in ever climbing debt, especially “given the huge wave of baby boomers hitting retirement that will be tapping Social Security and Medicare”, to quote Mr. Bernanke. Unfortunately, he also didn’t offer any specific recommendations on what steps should be taken to bring the deficits under control. Of course not. But I’m happy that he at least noticed and acknowledged the problem. Sadly the road from here to solution is long and perilous. However, the sooner we start the journey there, the better. 
There, done with ranting and raving. At least all these fundamental developments are good for markets’ volatility.  Things are moving. This helped the two trades I covered yesterday. Both of them are over now. 

The AUD-CAD trade met its objective and was closed for a 100 pips gain. Question was posted about why not stay in it longer? As far as I’m concerned this trade is fulfilled. It is possible this pair will move higher over time, but I’d rather take profit now and try to find another set up.
Another set up discussed yesterday involved GBP-NZD.

I was looking for a reversal on hourly chart, with a breakout above 2.5450.  It did happen and price moved fast, too. Target of 300 pips was reached maybe an hour ago. It turned out to be a very good trade in a rather challenging currency pair. Also, this cross is likely to move higher, but I’m content with the result.
Japanese reversed today. At this time all JPY pairs are still falling. I think tomorrow  will be a good day for long only GBP-JPY trades. Breakouts on 5M chart, results in next post.

Mike K.