As the rush of unwinds, short term sellers and event-chasers continued to step up to the plate last week, a continued, slight gap lower came in today with the help of yet another event, perhaps less conventional.

It's mainstream buzz at this point that IMF Chief Dominique Strauss-Kahn was arrested by the NYPD on alleged rape charges, and now with a medical exam requested, getting a delayed arraignment in New York.  As many of you know, this isn't the first time DSK was under the microscope for such charges.  In 2007 a French journalist accused him of similar activity but decided not to press .  You can read more about that drama here.

Not good timing for the Eurozone, DSK.  A meeting is scheduled in Brussels at 3pm today to discuss, among other things, the fate of a requested 110 billion euro bailout from the EZ and the IMF.  But before we get all gloomy and decide that all is but lost and forgotten, it's safe to say that the IMF can function without the abilities of DSK (John Lipsky, first deputy managing director has taken the helm) and the market is unlikely to keep selling short term risk just based on an event like this. “To hell and back”, as they say.

There are some items on the agenda going a bit under the radar at the moment but definitely of interest to us in terms of defining a daily direction, more specifically, a cool 78 billion for Portugal and the nomination of the next president of the ECB.  With “undwinds unwound” and the potential for more cash to struggling economies on the way, dreams can conjure and some Euro buying ensue….

Technically speaking, an outside bar with a nasty downclose pummeled out the week, leaving some grand holes to fill to the upside.  We're already below 1.4100, or close to 900 pips off the the highs with nasty gaps in both directions.  In a perfect world, I would like to see the 1.3900 area ASAP (100% extension of major trendline break). There is still the risk of residual selling but given recent history, wallets are still open and money is still being fed hence bailout hopes and realities likely to positively continue. We nonetheless have a decent range to work with and seeing some changing tides in the interim.

The now-higher interest rate differential is indeed still game with the Euro versus USD and the United States has yet to starkly impress.  The commodity / risk sell-off has grabbed mainstream attention and our contrarian attention is naturally peaked.   As I write Euro has just busted Friday's close.  Use the comments below to tell us what you're up to…..