Forex.com says key market themes for 2Q 2010 include prevailing choppy, range-bound short-term trading conditions; continuing Eurozone/UK credit concerns causing the euro to be under pressure and the pound to weaken;  a weaker yen on Bank of Japan rate easing and the likelihood of outperformance by the Canadian and Australian dollars. Forex.com analysts also say China’s efforts to restrain its economy are a “major risk to global economic recovery.” As for the U.S. dollar, they say it will benefit on growth divergence, increased risk appetite and speculation that the Fed will raise interest rates. “We expect the U.S. recovery to outpace other industrialized economies, likely lending the dollar support and keeping pressure on the euro, the pound and the yen,” said Forex.com Chief Currency Strategist Brian Dolan in the report.

Our experts will offer up a complete forex outlook in Futures April issue, on newsstands and online March 26. The issue also includes our Traders View of the World feature, for which we traveled to Washington to talk with Congress, the CFTC and other insiders about how new regulatory proposals could rock the trading universe.

“Given that this market trades $29 million per second, $2.5 trillion per day, I can’t imagine what kind of an order it would take to move the euro 150 pips,” says Ken Lazzara, chief dealer at EasyForex.

Lazzara says that while this is the most active part of the currency trading day, it would take an enormous amount of business to move the market that much, that quickly. “$25 billion might not even be enough to takeout all those offers and rally that much. The interesting thing is, let’s say the top was 128.10, within the next hour it traded back down to 125.60.”

During that same period, gold moved to $764.80 from $734.50. “In the commodities, something like that happens and immediately you think it some kind of natural disaster or someone shot off a missile. When gold moves like that, it means there was a big piece of bad news somewhere,” Lazzara says.

Andrew Wilkinson of Interactive Brokers immediately dismissed the CPI numbers release given the timing and the fact that everyone expected the numbers to be weak. He postulates that it was a rumor that the Chinese government would begin shifting its reserves from U.S. dollars into gold. “This clearly took a grip and triggered rumored stops in the euro above $1.27. Gold also rallied apparently, but both gold and euro have subsequently faded. I did also see the British pound sharply higher and just assumed it was impact of minutes from the BoE [Bank of England].”

Any thoughts? E-mail me at cmcmahon@futuresmag.com