Got News?

The deepening world economic crisis and a possible spat over currency levels hung in the air as the United States and China sat down Thursday to discuss the future of their economic relations.

Though there have been tests and false breaks for AUDUSD over the past few weeks, the technicals currently defining its range are both clear and strong. Should volatility over the next 36 hours hold up, there may be an opportunity for a short-term setup.

A look at economic developments and stock-market activity around the world Wednesday: ------ BERLIN -- The German auto industry's leading trade group, the German Association of the Automotive Industry, said it expects next year's car sales to be the worst since the reunification of the country in 1990.

New Zealand dollar gains post-RBNZ rate cut to 5-year low of 5.00%, will the euro and British pound respond the same way to expected cuts by the European Central Bank and Bank of England tomorrow?

The dollar strengthened against most major currencies Wednesday as stocks fluctuated on weak economic readings and investors anticipated rate cuts from both the European Central Bank and the Bank of England later in the week.

The U.S. dollar gained against most major currencies Wednesday, ahead of expected interest rate cuts by European central banks this week and amid volatile global equity markets.

Patterns have formed over the past several months in the Yen crosses that suggest a rally is imminent.

The Reserve Bank of New Zealand lowered its benchmark lending rate 150 basis points to a six-year low 5.00 percent. What is more surprising , and a true testament to current economic coditions, is that this was exactly in line with economists forecasts.

With liquidity topped off after last week?s extended US holiday, market participants are once again trying to establish the primary, fundamental driver for the dollar going forward.

The outlook for the British pound looks dim as the Bank of England is widely anticipated to follow up their October 8 and November 6 rate cuts with yet another aggressive reduction on Thursday morning.

Market turns occur at sentiment extremes and there is nothing more indicative of a sentiment extreme than a market story featured on a magazine cover. A few issues back, the Economist magazine cover read, "All You Need is Cash".

There is quintuple divergence with RSI on the daily NZDUSD chart, which warns of a reversal.

Staying bearish the USDJPY has proved a wise decision although the decline over the last month has been choppy. As long as price remains below 96 , bearish potential is significant .

Looking in at the hourly chart, the GBPUSD rally from 1.4554 is clearly corrective. While this could be the beginning of a flat or triangle, it may also be a completed correction at 1.5539 that will lead to new lows.

I am sticking with the triangle pattern. Triangles consist of 5 waves, a-b-c-d-e.

Higher highs and higher lows since the March low favors bulls longer term.

The rally from just below 1.15 is in 5 waves and could be a truncated 5th wave.

There remains potential for a large recovery back to the mid .70s given the 5 wave drop from the top .