USD Oversold at 61.8% Retracement level

USD retraces 61.8% of total downside in 2010-11
Currencies have played a crucial part in the game of asset rotation in recent years. Their movement provide insight into longer term trends that help assess medium term opportunities in the financial markets. The USD is now at a crucial level that just might dictate the next turn of events:

We are at 61.8 Fibonacci Retracement level of the complete downside move that lasted from first week of June 2010 to first week of May 2011.

With the RSI indicator extremely oversold, after a momentous rally these last few weeks, chances are that at this level investors are offered a few choices.

Gold prices also have been languishing as every attempt to rally has been thwarted by investors' preference for currencies, and we have seen markets taking quite a plunge during May.
Time to Asset Rotate? SELL THE DOLLAR AND ROTATE BACK INTO RISK ASSESTS? I would be very surprised if investors did not at least give a good try, European labour pains or not!
I do not however expect any bounce in equities to last just yet. June's cyclical downturn is almost certainly materialising given the fundamental back drop of another Greece election, increasing tension over Spanish banks' shortcomings and the end of 'Operation Twist'.

So much for today. Investors will soon receive proposal to adjust their portfolios accordingly. Check your inbox.

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