There's a strange similarity in the opposing pairs eurusd / usdjpy right now. This is hardly news as the general disparity between the ¥, € and US$ are the main topic of the G7 meeting. There's a potential turning point here that I've noticed on the on the charts which, if it holds, will make a tough spot for the € even harder.



¥ 120 and 1.29 € are clearly tipping points. Right now I'm long eurusd, and short usdjpy. Oddly enough it's the ¥ short that's making the money. If I spot a reversal at ¥ 120 it would suggest a new strong leg for the ¥'s downtrend. Buy any stochastic oversold in EURJPY. Oh my fucking God look at this chart:



I'm looking to short the equity market right now. The question of course is who's the best short? I wouldn't look to short any multinational that can exploit these currency and labor pricing discrepancies.

My bet is that the big loser of the G7 meeting will be the Yuan. According to the "Big Mac" index it remains the world's most undervalued currency. More importantly it remains the easiest kitten to kick in the room. I've often argued that the only bubble in the goldilocks economy is the China bubble. There's growth there for certain, but everyone seems to forget these guys are a bunch of commies. It's like expecting miracles out of the folks at the DMV just because they're underpaid.

There are real arbitrage opportunities in all the BRIC countries, but the Yuan is the only currency in that mix that doesn't float. Do we really want the Yuan to float? If we did wouldn't that be the single largest threat to the US$'s preeminence? Okay, no wonder we're not aggressively pursuing that one.

The China ETF FXI is in the last moments of a closing pennant. Look at the percentage change on that chart. If it falls south of 102 short that bad boy and really impress your friends. "Hey! I'm shorting China!" Yeah, that would turn a few heads.