While there is plenty of doom and gloom out there presently - and we certainly make full use of much of it below - there are clear technical signs that a more bullish outlook should be adopted, in both FX as well as equities (from a portfolio view). Allow us to state our case. First, the bad news, and the scenario that appears priced in:

Current Market/Consensus View

Unless you have been living in a cave for the last several months, we all know the ugly details of sovereign debt that many European countries are now facing. Regardless, take these interesting statistics from Dennis Gartman's piece this morning:

• Ireland's debt is 200 billion euros (and the government has guaranteed an additional 400 billion euros on top of that to support their banking sector). The problem: they only have 34 billion euros in tax revenue!
• Portugal has debt of 160 billion euros and their tax base: a measly 38 billion euros!
• It doesn't get better with Greece, Spain and Italy.
• And the vaunted European Central Bank (ECB)? Well they only have about 10 billion euros of equity so it wouldn't take much of a write-down for them to become insolvent as well!

Source: The Gartman Letter/Deutsche Bank FX

The math doesn't work. There is not enough tax revenue coming in to re-pay all these debts and also provide for a functioning society. Raising taxes will not solve the issue nor will austerity measures. Each of these lead to slower economic growth - there is no escaping that fact. Why do I mention these grim scenarios/statistics? There are two ways to look at it:

• All the bad news is on the table - and presumably priced into the market to a large extent. Therefore, given the current technical backdrop there may be solid reasons to become far more optimistic about asset prices going forward.
• Maybe there is a really bad scenario unfolding that the markets have simply not priced in. Recent cases include the real estate/loan debacle and the internet bubble - neither were priced in and did tremendous damage eventually.
Each scenario requires very different trading/investing strategies and like any flexible trader one needs to always do scenario planning and have a plan for either scenario.

The Alternative View

Given that we view the market through the prism of technical and inter-market analysis, we see a slightly different scenario unfolding per our observations from yesterday's mid-day session.

• S&P's off 1.70%
• Commodities (CRB Index) off 0.97%
• AUD/USD off 0.89%
• NZD/USD off 0.23%
• Copper off 0.20%

This is not a widespread sell-off and the typical asset classes like commodities and rsk related FX pairs are off a mere fraction when compared to equities - just something that is noteworthy and will need to be monitored but does fit in quite well with our multi-week view on market direction.

• Running triangle still intact

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• Copper prices remain firm

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• USD/CHF, a solid 'lead' currency for DXC direction, still points to lower levels

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• Bond prices poised for lower prices/higher yields

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Now that a technical backdrop has been laid out via some inter-market analysis, which currencies are poised to trade in tandem with this outlook?

• USD/SGD 60-min chart

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• USD/SEK is poised to trade into resistance at 6.7000/8000 - a decent area to contemplate short positions
• AUD/USD - despite sideways price action, prices are poised for higher levels when equities regain their footing. A break above 1.0789 will set a more bullish tone with support seen at 1.0530
• EUR/GBP sitting on trend-line support at .8725/40 but given the overall backdrop technically, this level seems unlikely to hold and prices should begin to move lower in the hours/days ahead. Look for .8600 initially as a downside target.

For more from Dave, visit Aspen Trading for more updates.