Technically the dollar looks like it wants to fall after its rally late last week sputtered this week. But I find it very hard to get excited about buying euros in an environment when European infighting over how to solve its sovereign debt crisis remains at the forefront, banks are having funding issues (perhaps temporary) and growing geopolitical instability in the most strategically important important patch of sand on earth.
Yes, US yields are falling quite sharply at the moment (down 6 bp to 3.565%), but we have to ask ourselves why?
In all likelihood, it is risk-aversion on a global scale.
Chinese selling was rumored above 1.3600 overnight. Trend resistance is now at 1.3617. If ya gotta buy, keep positions smaller than usual…
