it is time the dollar?

Hi,

Sudden reaction of the market interest rate on Bernanke's announcement confirms the view that markets are highly dependent on cheap money. Certainly, the Fed, seeing the reaction of the markets will work very slowly, but when many investors based their strategies on a low rate, they will want to stay ahead of reality than wait for the official central bank movements. Hence the cycle, even if mild, can be discounted heavily in the coming months. But the direction seems clear - yield up stronger dollar.

After China's central bank has consistently refused to support the banking sector situation began to take the form of panic (effectively multiplying the effect of rising yields in the U.S.). As a result, short-term rates market brushed against 13%, even though the official lending rate is only 6.15%. Such a situation could quickly turn into an avalanche of insolvency, effectively resulting in what the Chinese authorities want to avoid, or hard landing. As a result, PBOC had no choice and to intervene, resulting in interbank rates fell by more than 3 percentage points, exerting a positive influence on the markets in Asia.

Markets have slowly forget about the European crisis, and although on the present moment there are no red flags around Greece is not entirely peaceful. The IMF said that Greece will stop paying aid from next month if the European side does not find the missing 3-4 billion rescue program. The missing amount is not the only problem the Greeks - European central banks refused to roll over Greek debt and hence there is a gap in funding. The European side probably will find a solution for this problem, but in Greek politics, it is not quite easy. The coalition we have more and more power after the ruling party wanted to close the public television, which caused numerous protests. At the moment it does not seem to Greece was to be back in the spotlight of the markets, but a change of sentiment towards EUR/USD factor may be an additional argument against the common currency.

Analyzing the events of the past few days, it would seem that the time came strong dollar. Today also I will try to show the current technical analysis of the EUR/USD

Successful transactions in the coming week.

best regards,

oscarjp

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