I am concerned about the extraordinary low level of volatility we've seen over the past months. This complacency towards uncertainty moving forward hit an extreme this past week following the December NFPs. Under normal circumstances, the big payroll miss may have stayed the Fed's hand, but the momentum of the first Taper in December likely keeps the central bank on pace. That will create confusion amongst traders. In turn trends will be smothered before they can take root and there will be a looming threat to volatility.

My only exposure at the moment is a EURAUD short that I am carrying from Jan 3. I'm sure from 1.5230 with a wide stop at 1.5400. While the ECB decision has dampened the pressure on an imminent Euro selloff, the general bearing in this pair still looks good. If there is a swell in risk trends, it benefits the Aussie more than the euro. If risk aversion kicks in, the Aussie pairs have meaningfully diverged from the S&P 500. And, generally the pair is overbought on a technical basis.

Looking ahead to next week, there are plenty of setups that look good from a strictly technical position or given the fundamental bearings; but I need both elements to make for an active trade.

Should risk trends remain steady and the dollar flounder from last week's NFPs, I will look for AUDUSD to extend its tentative rebound beyond 0.9000.

The Aussie is undervalued for its yield and yield forecast in general, which presents other opportunities - I like GBPAUD in particular should it break a head-and-shoulders neckline below 1.8200.

Another pair not dependent on risk trends and encouraging for its extended yield outlook - something that has driven a six month trend - is a possible GBPUSD reversal. If the pair breaks 1.6250, it stands to trade deeper within a multi-month range.

The list of opportunities should risk aversion kick in is long. I like USDJPY extending this turn below near-term support at 103.75 - but only if it is supported by broader risk aversion such as a drop in equities.

Arguably the most exposed of the yen crosses is EURJPY. Fundamentally and technically speaking this pair has run far beyond its reasonable bounds. I'll look for a drop below 141 on general risk aversion, but it is unlikely I would take both this and the USDJPY at the same time. Between the two, this is my preference.

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