Trade Team Update

Surprise, surprise, another day, another new all-time high... we've got a lot to cover today, so lets get right into it...

Well, the excitement from yesterday's Fed liquidity move didn't last long and the market was back to pushing the euro north... no big shock there...

There were two very specific comments made early this morning that got the ball rolling and helped light the torch to push the EUR/USD to new all-time highs at 1.5570. And here they are:

UAE Economic Minister: Changing USD peg may ease inflation

China Commerce Minister Chen: China wants to invest more FX reserves abroad

And that's all the market needed to hear to go nuts and start buying euros and selling dollars... I don't want to say "I told you so," but I do want to call to your memory something I posted in Sunday's update:

China -- with the USD at multi-week lows against the euro and as reflected through the USD Index, it's very likely we could hear from one or more Chinese government finance officials about the weak dollar, about currency reserve shifting, re-positioning with U.S. debt instruments, or a combo of the three.

The EUR/USD was also helped along by oil pushing well over $110 and by gold continuing it's bullish run... in addition, as the dollar plunged against the euro the 10-year yield tanked, only further helping to fuel the fire... basically all of the key market correlated variables were working against the dollar and for the euro in today's market action...

EUR/USD:

First of all, we have some mega fundamentals tomorrow, the biggest of which is Core Retail Sales... to be honest, my brain is fried after today, so I can't get into any big fundamental analysis on tomorrow's data... basically, the retail numbers should be crap. End of story on that one.

Am I still biased euro long? Of course, I have been for over a month and I'm not changing my bias now... I have not seen a single sign or signal in the market to cause me to change my bias at all whatsoever...

But, the longer we extend this bull run and the higher we go into unchartered territories, the more cautious and conservative I get when I add new euro longs...

One reason my caution is growing is because of what a central banker or what several central bankers could do about the crashing dollar and the skyrocketing euro... the more this exaggerated bull run is extended the higher the probability that we get some type of intervention in the market... just something to keep in mind...

For the past two days I've cautioned about some "interesting" things happening during the early European/London/NY sessions and I have to give the same cautions again... we may see some ranging during most of Tokyo, but that could all change after 0400 EST tomorrow morning...