Interesting week last week with Draghi really lowering the risk tone and driving the Euro lower.
It will be key to see how the euro holds early this week. A bounce could provide further shorting opportunities near pivot highs, however, a break of the weekly lows (of the past two weeks) could open the door up for a much larger move south.
We also have a few continuing themes:
Greek bond buyback was short of its target after the deadline, so watch for more news on Greece before Christmas, as we could see some wider themes.
The Italian political market is looking shaky with Berlusconi gearing up to run for re-election. Markets hate uncertainty and frankly, they also aren't that keen on Berlusconi.
The Fiscal Cliff, as we commented last week, is an odd situation. The reality is we have one of three potential scenarios:
- Last minute deal - potential for "risk on"
- Deals on some parts with the rest being delayed to Spring for decisions, thus a stumble but not a significant fall - most likely - most likely "risk off"
- Full blown leap off the cliff - confidence shock to the market, potential for a further downgrade - weaker USD, potentially wider "risk off"
Careful with this, though, as the press in the US are desperate to land a good Cliff story and the political environment really is designed to blame the other party, therefore, make sure you read articles or take them with a pinch of salt.
Data-wise this coming week there are some interesting points, watch for the German ZEW Economic Sentiment Tuesday morning and the Bernanke Presser on Wednesday.
The key for me this week will be to see if Price Action off the back of data releases and news can break key support levels. This could open up some nice breakout plays on the intraday and daily time frames. Be careful with USD weakness vs. risk-on though, as Cliff woes can translate to dollar weakness which doesn't necessarily mean risk-on.
For breakout plays, I look for a strong break of the key level then look to place a limited order in the direction of the break at the level for a retracement to get me into the position; stops above the level, normally above a key interim level.
EUR/USD
A strong move lower in the euro last week ended on Friday with a slight bounce off of a key support level.
My favourite trade idea, break of support putting me short with stop above support level looking for an initial test of 50 day moving average then a push lower.
My bias would be negated with a break above the 1.32 handle.
The weekly really shows us an overall short bias in long term trend and short term signals, therefore we could look for break of the weekly lows aiming for pivot low with stop around the 1.32 level as well, obviously this is a much larger long-term trade idea though.
GBP/USD
The pound, like the euro also put in a bounce on Friday. However conflicting signals on the weekly chart and COT means I stand aside on this pair for the moment.
AUD/USD
The aussie really remains in chop and continues to hold its ground well. Numerous analysts are highlighting how overpriced the aussie currently is, however, given this pairs recent ability to hold its ground I stay firmly on the sidelines with this pair.
USDJPY
Our strategy remains in tact on this pair. Really looking for a pull back to the 81.00 handle or just below and a long entry signal off of a support level. Long term I like this pair for a move back above the 84.00 handle.
GBP/JPY
Yen weakness continued to hold this week, we still like this pair for a move lower but this pair has held up really well recently and therefore the probability of this trade paying off are reduced.
EUR/SEK
Bounced slightly on Friday but we still like this pair for further weakness. 
EUR/CAD
Moved lower on Friday but did recover slightly. If we break the pivot lower we could see a further extended move lower from here.