This is a guest post from Precision Capital Management
The Precise Take – Markets consolidating ahead of Bernanke testimony
Leaders Analysis: The EuroYen sold off hard yesterday to strong support at the ~121.5 level. The US Dollar had already made most of its up move by the open, but did manage to extend a bit on the equities selloff. 30 Yr T-Bond futures had a big up day, rallying to the 20 day moving average. Overnight, all three are consolidating yesterday’s moves, and are equities neutral.
Medium Term Analysis: Yesterday’s equities selloff was capped at about the 1090 level in the ES, which did not have much particular significance except that it was just below the lower end of the value area highlighted below in green. Our hypothesis of the US Dollar topping this week (and supporting an equities rally) was based partly on a cooling of the Greece situation, which instead flared up again yesterday. Accordingly, we no longer believe that…
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