Not much go

Not much of a bounce in the EUR. I guess someone either wants out or to get short. It is hard to assess the market reaction to the upcoming EU constitution vote. But given that the dollar is strong despite bad data I think the market is rendering its decision. However, if Chirac and company are able to turn it around, things can change. In addition, it is odd that the EUR wouldn’t oscillate back toward 1.33 before breaking out.

This is the first close below the trend. While it looks like the dollar has turned the corner, it is not yet definitive. The USDX has approached a critical point but not passed it (as have many other currencies vis-a-vis the dollar). The EUR has just one close barely below the trend, and remains above the 200 day MA as well as the prior interim low at 1.2729. Note also that the JPY got to within 27 ticks of the trend line and then turned, thus the line has so far acted as resistance. The South African Rand did a similar dance.

At the same time nearly all commodities are heading south. Something big looks to be in the offing. China and japan bickering does not help matters. While on that note, the Chinese are bent out of shape over rthe fact that Japan is ot contrite enough over their odious behavior in WWII. Please. Coming from a Communist dictatorship that regards its people as means to be used for the ends of the state, and having killed, imprisoned and maimed millions of their own citizens, they should just shut the hell up. In any event, geopolitical BS in Asia may unravel the uneasy state of the global economy.

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