With the market anticipating no major steps to raise rates this year, equities have resumed their climb, quickly recovering its post-data dip and now trading 1% firmer on the day basis the S&P. EUR/USD, AUD/USD and Cable have all bounded sharply, as have the JPY crosses.
Patient dollar bulls can take advantage of the dollar selloff to add or establish fresh positions as we approach downtrend resistance in the 1.3665 area. A stop above the recent highs of 1.3692 looks prudent, say a bit above 1.3700.
Bernanke says the Fed will continue to evaluate whether additional stimulus will be necessary to foster job growth. This keeps the QE door open, a dollar negative.
