I am looking at the USD/JPY for clues for risk sentiment. We test the 50% retracement of the recent downswing. A determined move above 98.70 opens up the possibility of a move back to mid-Septembers highs near 100.50 and 99.75. This scenario plays out best if we have a positive resolution in Washington and a "risk-on" relief rally. Let's see how equities and risk sentiment responds to events out of Washington. Where risk sentiment goes, so will the USD/JPY. If there is a positive resolution, with S&P heading higher, the Dollar may extend this recent move up to the psychologically important 100 handle. I like to use the USD/JPY as my guide for the rest of the JPY crosses (EUR/JPY, GBP/JPY, AUD/JPY, NZD/JPY, CAD/JPY). If the USD/JPY is heading higher, its a good chance the rest of those pairs will also be moving higher (as they are the higher yielders in the risk-on trade). - Nick