• This morning, financial markets have started the week on a positive note. Stock futures markets are 0.75% higher with the EUR/USD 0.11% higher. The situation was much better at the start of the European session, but the weekend's enthusiasm has receded somewhat.
• The early catalyst was yesterday's release of the the details of the Irish bailout. The EU/IMF led bailout was broadly in line with the expectations built up over the previous week. There appear to be no provisions for bond holders to share some of the pain, a move that has particularly relieved some countries with large exposures (such as the UK).
• There are no top tier economic announcements due today and sentiment will probably still be dictated by the bond market's reaction to the current sovereign crisis. No doubt the details of the Irish bailout will be picked over carefully for any wider implications or lack thereof.
AUD/USD trade idea:
The AUD/USD has rallied well off the lows this morning, making a strong bounce off the 0.9600 level.
• The DVI and DVB technical indicators (See DV Indicators) imply that the AUD/USD is over sold in the short and medium term, giving a reasonable chance of a rally today.
Summary:
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