Risk is clearly in vogue Monday morning as the dollar extends its slump and equties and commodities add to recent gains. The S&P 500 is testing its 2009 highs and could be in for another short-covering spike if that level is breached.
EUR/USD is struggling to overcome 1.4800 on a sustained basis, however.
Resistance is scattered up from 1.1815/20 to 1.4822, the 2009, to 1.4866, the fall 2008 top.
I would not be surprised to hear reports of Chinese selling into strength today as a an acceleration is USD losses is not in their interests, given their huge dollar-based reserve holdings. Sure they’ve hedged some, but not enough to cushion the pain.
