With the rally this morning leaving a clear 3 wave correction from 1.3546 to 1.3456, it looks as though 1.3546 will be breached.

Although the Nikkei bounced tonight ending up more than 1% on the day, the European bourses were considerably more jittery on fears of further fallout from the liquidity crisis that has gripped global financial markets.

It appears the Dow wants to check in with 13,300 before we retest the lows, so searching for USD/JPY and EUR/JPY intraday long setups while this plays out is not unjustified.

Professional system trader Art Collins shares his daily biases in the index, bonds and currency futures markets for August 21.

A majority of the world's investors now believe in two great delusions. One, central banking has taken the risk out of investing, and its corollary, market prices are now on the rebound.

Stocks rebounded today, taking carry trades higher in the process, as central banks around the world continued to inject liquidity into the financial markets.

The Chinese yuan gained against the US dollar and the Euro while losing against the British pound in the overnight session as stock markets in Asia corrected from the credit debacle last week.

A modest carry trade rebound left the US dollar lower against higher-yielding forex counterparts, leaving scope for continued greenback declines through the coming week of trade.

Derek Frey provides weekly market commentary on currencies for the week of August 20.

Currency technical analyst Jamie Saettele analyzes the euro against the Japanese yen, Swiss franc, and British pound .