Since Tuesday's US inflation report induced dollar reversal, the Euro has defied interest rate differentials and traded in lock-step with traditional risk assets. After running into ichimoku resistance, momentum stalled, failing to break out higher, and Euro closed the week < 1.062 @ 50% retracement. Price action had moved very very far from monthly VWAP. This has since been worked off and I expect fundamentals to return to the trade and the dollar to resume strengthening. Watch 1.058 and $ZN for the next leg's directionality. 1.05 is still my medium term target.
