EUR/USD is edging above the 1.4850 level which will prompt those “short in the hole” (near the lows) to cover and reassess. Not a bad strategy given how many times we’ve failed to overcome the area of support between 1.4805 and 1.4822.
US equities are recovering early losses and commodities are solidly in the black as well. Looks like the market is beginning to take recent Fed comments (especially from Kohn) that they are trying to engineer the movement of capital into riskier assets. Can I interest anyone in some Turkish lira-denominated Brazilian CDOs?
1.4900 is next resistance for EUR/USD. Expect short-covering to accelerate above that level.