Hello Koala King and folks.
After the statement and the continuance of low interest rates by the Federal Reserve, the first reaction brought about a sale of US Dollars and it further weakened. However the bond market did not significantly change. The Bank of America was also bearish against the dollar as interest rates remain low. However eventual market reaction did not show this view.
Central Bank of Brazil on Thursday in an unprecedented move decided to increase its US Dollar reserves and that contributed to an atmosphere of risk aversion
At the same time the government of Greece’s request for aid from Europe and the subsequent controversy concerning the differences of France and Germany with regards to how the Greek solution should be intensified the atmosphere of risk aversion and that caused an increase in value of the US Dollar against the high-yield currencies.
Now all eyes to are on Europe and in particular Greece. If Greece is to declare bankruptcy, the Euro will face serious consequences, including the bankruptcy of many German banks. German banks hold the most debts of Greece. A significant threat to the existence of the Euro currency.
As I said last week, the possibility of a strong US Dollar is up and one should not without reason sell US Dollars. Now buying US Dollars on top resistance is possibly low-risk compared to selling. I am looking at selling the EUR/USD on the top resistance.
On a technical basis if 1.34 is to be broken, next target will be 1.30 or 1.28. You can see this which I highlighted from March 2009 to end April 2009 below.
Last but not least, I will like to congratulate Nowruz (21 March)(Happy New Year of Solar Hejri 1389) to the all Iranian and people of Turkey, India, Azerbaijan, Tajikistan, Uzbekistan, Afghanistan, Kazakhstan, and Pakistan.
Masoud.
Masoud is a businessman and a Senior Koala at the Forex Factory Koala Thread.
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