What was looking dismal for the equity markets over the weekend turned positive on Hungary tempering fears of default risk and a European meltdown along with the recent weakness in the Euro becoming the catalyst for a shot in the arm for German exports. As expected this is the perfect launching pad for significant carry trade interest as well. Sort of the perfect set up there as the weakened Yen last week dropped the cross down into a perfect dip. The 10s and 2s are being offered again at a nice steady pace and the Euro is relatively flat as we head into the open. I think we should see volatility come off a bit this morning and as such we may see some nice rotational activity returning to the market. In order to return to a true bullish bias though we really need to be firmly supported and trading above the 90-92 handle and I doubt we get there today. If we do get our head poked up above the day session pivot at 71 or so I do think we can expect a relatively quick move up to 78 or so which is the next chunk of resistance to get through. Beyond that there is a rock of resistance starting at 82-83 which will be very tough to get through and should provide perfect rotational conditions for us. On the other side, the gap fill fade is a good possibility as I think this overnight rally is a bit overdone and we do have a developing support around the 62-63 handle. If that holds, the next area that needs to settle in as support is the previously critical 67-70 area that ultimately failed last week which put us down here. If the 62 area doesn’t hold I am nearly certain we will go all the way down to re-test our current support at 52 or so, but unless we get very negative news or sentiment development I am confident it holds. All this said the gap fade, the interim support fade at 52ish and the interim resistance fade at 82-83 represent the best opportunity “brackets” around the market today for longer term traders.