Well... At this level (1.2636 to 1.2622) the euro is weaker than the dollar is stronger. We'll either consolidate here for awhile, or continue a downward drift. A 1-minute chart tells the whole story. DD 1.2627
This Thread is the LONG TERM TREND !!! Letâs put things in perspective. The chatter given for the dollarâs rally the past 2 days was âsafe haven flowsâ. The only problem with this rationale is that gold and to some extent recently even crude oil, is considered a safe haven. Gold sold off sharply today and crude was down. Additionally, the Swiss Franc is considered a historical safe haven play. It too was down. Typically a safe haven play also sees bond prices moving up as money flows into that pit. Bonds were down today for most of the trading session, struggling to rise and just barely poking their heads into positive territory with the yield on the One and the Two Years actually ticking up, not down as safe haven flows normally suggest. The stock market indices also faced what seemed a strong selling headwind for most of the day, especially considering the extent of their recent move lower. The S&P closed lower on the day and the DOW squeaked out a positive close by a meager 7 points. As a matter of fact, just about everything was down today. The only thing that wasnât was the dollar. So all that money out there was flowing into the dollar as a safe haven play! Pardon me for saying but I have been around these markets too long when I say that this doesnât pass the smell test. You do not have a safe haven flow into the dollar when all dollar denominated paper assets are down or managing a mediocre rise at best. What really happened today was that we were treated to a short squeeze in the dollar, nothing more nothing less. In addition, maybe someone from the currency interest rate differential crowd can tell us exactly how high rates will have to rise on dollar paper to compensate in the face of the following article. Imagine a company such as Widgets Inc. issuing paper paying a nice fat yield of 20% when the company is on the verge of bankruptcy and you will see how much sense this dollar safe haven nonsense talk has to it. âQuick Momma â letâs take all that inheritance money we are going to pass on to the kids and park it in Widget Inc. bonds. After that we can sleep soundly at night knowing that we have made a quality safe haven playâ. I donât know which the scarier scenario is â that there are analysts who spout this nonsense because they actually believe it or people who actually do it. http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=51078
I agree, I think the dollar is a bomb ready to go off. And the Asian countrys may be getting tired of holding the dollar for the US.