Two Down, More to go?

For the more experienced traders,

Something of a bit of correlation I've somewhat noticed in the past, but not sure of myself. Cable/Usd after making the high at 1.9910 has come falling off its mountain pretty fast now down to 1.9645. Also, same with Aussie failing to take out .8000 has now fallen back to .7750. That's 1 major currency and 1 minor currency failing to take out long time highs and heading south. Could we expect this exodus to roll over into other highly valued pairs? When money starts leaving certain areas, it usually has to go somewhere else. How do you feel that this could be the beginning of a switch in mentality leaning towards a favoring of the USD?

Further support I find for this comes fundamentally in the price of oil. With oil at lows not seen for 2 years, this helps the US and Japanese economies (I think nearly 2 of the largest oil dependent nations in the world, certainly the US anyway), it supports a stronger USD and JPY. Something we have begun to see in the last 2 or 3 weeks by the Eur/usd failing to take out 1.335, now JPY has shaken off its weakness for a bit. Cable's interest rate increase seems to have made a last ditch effort to run it up, but I think it looks like it may join the parade down too.

Well, if anybody has some further input... feel free to add please!

GirlFlyer

It seems like Davos has put some risk factors for the carry trade on the table. Rumors abound that the G-7 will focus on the weak Yen and that has the market cautious. I think what were seeing is defensive positioning ahead of the G-7. That will be the key event in determining the direction going forward.

If your long the high yielders I would consider taking profits, but it's probably too soon to initiate shorts.

Edit:/ That and every pair just triggered stops so look for better levels over the next several hours if you do feel like shorting...