Wednesday, 11 March 2015

Increasing concern in currency land

The Euro/$ settled the day -1.4% @ 1.0697... and this is causing increasing concern within the broader capital markets. €/$ parity - within the near term, would be a real problem for the equity bulls, opening up a test of the 200dma.. now @ sp'2001.

Euro, weekly

USD, monthly'1, 15yr



*its late... and I'm tired... so this will be brief..

Euro looks vulnerable to a panic down cycle, if parity is lost against the USD... opening the door to the low 0.80s.

Meanwhile, King $ grows stronger almost every day.. and the giant 100 DXY level approaches... from there... 120.. and eventually (given a year or two)... 160s.

As for equities... with the daily close <2050 (a surprise to me), market is now vulnerable to further downside to the sp'2k threshold. All things considered though... I'm guessing we see at least some degree of upside into the weekly close. A great deal will now depend upon how the market copes with Yellen next Wednesday afternoon.

Looking ahead

The only things of note scheduled for Wednesday are the EIA oil report.. along with US treasury budget data.

Goodnight from London