It is a one way street against the USD. Other than CAD and JPY, the USD has lost about 10% against the majors. What is driving this? It is a combination of a series of weak U.S. Economic data which has pushed the U.S. treasury yields lower against Bunds, Gilts, JGB's and other equivalents, as well as softening concerns about Eurozone risk (which still exists, by the way). The trends are simply driven broad based USD weakness and lower yields.

The majors are approaching key technical levels, as discussed in Pro Traders Club, and we could see a slowing of these trends following this weeks barrage of important data. We are looking for technical patterns to give us indication to sell into the current rally and are easing off our longs into the major resistance faced by EURUSD, GBPUSD, AUDUSD and support for USD Index. Watch bond prices closely as the market seeks yield outside of USD's. As bond prices fall, the USD will likely stage a rally.

We are likely to see continued USD weakness into Friday's NFP as risk rallies in a scene of good or bad data. When data is good, risk rallies with equities. When data is bad, risk rallies on yield support favoring high yielding currencies. Read More...