question is focus. where is/will be the focus next. remember, the market is not full of "sophisticated" quantatative finance PhDs - most are just average Joes tryin' to make a buck. meaning subtler complexities aren't effective market movers now. with the focus off the rate hike, USD still looks like a sad sack of Siberian snake sht. hence, you got EUR/USD moving back up - now at 75-points higher than it was. the issue is, what is really the focus the 'market' can trade upon... now? If you figure that out, you may see where the next move is headed. what's the biggest thing on the table now, oil? war in Iraq? employment numbers? Korea endless nuke crap? fx
Gas prices / consumer sentiment. A continued down surge / collapse in the US housing market. Inflation struggles? skz
Rita still seems to be the focus and the explanation for everything I see right now. Oil has shown signs of weakness and, as many have mentioned here, it should be in the 70âs and its not, therefore it is believed that its trend is down and the common explanation for that is high inventories. I believe in another explanation: oil is weak because the stock market is much weaker â when oil goes down, the stock market doesnât show its smiley face any more --- so slower growth expectations translates into a flat trend for oil prices. I agree with your opinion about the USD. The problems in Germany are serious but the underlying trend for the dollar is still down because of increasing uncertainties about growth in the US.