At the start of the week, world stock markets encountered a severe sell off that threatened to question the strength of the bull’s resolve.

Yesterday, the bulls passed that test with US markets erasing Monday’s losses. The argument over the sustainability of the rally that has seen stocks rise 15% since July has been won….for now.

This morning, the buyers have taken their foot off the pedal and the FTSE, CAC and DAX have opened down around 0.5%. The morning’s main economic news items are US existing home sales at 14.00 BST with Fed Chairman Ben Bernanke speaking at the same time.

Commodity Currencies Reverse Declines

The Asian session saw gains for the Yen against the Euro and Pound, but those gains are being reversed as the London session starts in earnest.

The commodity currencies of the Canadian Dollar and Australian Dollar are also reversing earlier declines as optimism seeps back into markets.

The CAD/USD has reversed early declines, but is at a turning point so any further gains for the Canadian Dollar could be muted. A Fixed Odds Double (Down) trade for the day may be the good way to place this.

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