EUR/USD has dipped back to the 1.3325/30 area after a spike just above 1.3400. US equities are losing some ground after vacillating around break-even much of the session. Shares are sown about 0.8% on average at mid-afternoon.
The dollar has taken a hit across the board today while commodities have extended recent gains and emerging markets have bounced nicely. This suggests the deleveraging that plagued the markets during the second half of 2008 has come to an end. The final piece of the puzzle would be equities, but they have recovered quite aggressively in recent weeks on their own.
Markets will stay thin through year-end potentially amplifying the impact of these emerging trends. Be careful about trying to fade this rally; it seems to be the real deal.
1.3300 is first support on dips with more around the 1.3255/60 level. Resistance lies at 1.3405 and 1.3515/35.