Great expectations are brewing with POMO in effect every day this week. No brainer logic argues for the bulls to be odds on favorites and although some disappointing earnings reports, like CSCO, have put a penalty marker on the field, Bernanke’s victory at any cost strategy will most likely propel the markets higher this week.
It was therefore with some surprise that the EUR displayed such a lukewarm to negative tone at today’s US market open. The EUR TRAK is almost horizontal, providing little guidance for the day and the TRAK channel is only 35 pips wide, suggesting that things might be winding up today in preparation for a more dramatic pop on Tuesday. Last week the EUR displayed some significant divergence from the TRAK after the first 2 hours of the US open and, at the current level of 136.00, oversold levels are a bit stretched.