The hangover after last week’s post-FOMC festivities has descended upon the markets with the US Dollar rebounding sharply against its major counterparts to start the trading week. The operative question to be answered now is whether these moves are only corrective or if the hearty dollop of QE criticism from the likes of the German Finance Minister (among many others) is starting to stir doubts about the policy’s merits or – worse yet – rekindle fears of competitive devaluation.
EURUSD has lost its grip on the 1.40 figure slipping ot support 1.3920 marked by the 61.8% Fibonacci retracement of the 10/20-11/04 upswing. A break below here exposes that rally's base at 1.3696, with a daily close under that level making for a medium-term bias shift toward a bearish view. I will monitor prices closely for attractive selling opportunities.