Daily Fundamentals - 10.05.11

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·    Dollar, Risk Reversal: Temporary Correction or True Trend Change? ·    Euro: Are Promises of Coordination More Convincing Than an Italian Downgrade? ·    Australian Dollar First Hit by RBA, Then Lifted by Sentiment Trends ·    British Pound Quietly Undermined by Deteriorating Yield ·    Japanese Yen: EURJPY and Other Crosses Add to Intervention Pressure ·    New Zealand Dollar Not Yet Suffering from Lowest Bond Yields Since 2009 ·    Gold Tumbles as Risk Appetite Revived Written by: John Kicklighter, Senior Currency Strategist Dollar, Risk Reversal: Temporary Correction or True Trend Change? When volatility is high, it boosts the potential for reversals just as surely as it feeds trends. And, when a trend isn't fully developed; it is far more likely that the exceptional activity level in fact encourages a switchback. That was the foundation of what we were facing with underlying risk trends and the US dollar through Tuesday. Both have tentatively taken large steps into reviving their respective trends; but they are far from fully established. And, without the proper fundamental pressure to keep the masses on course; errant runs are virtually guaranteed. As such, we are presented with a EURUSD rebound to its former critical support at 1.3400 and the S&P 500's (our favored risk barometer) jump back above 1,100. That said, the storm clouds are gathering and the markets have undoubtedly grown more sensitive to the negative developments in economic activity and underlying financial conditions. With an inherent negative bias; we are simply waiting for fundamental catalysts...   Download the Full Article Best regards, DailyFX Research Team research@dailyfx.com DailyFX Home | research@dailyfx.com | Contact US ©2009 DailyFX. All Rights Reserved. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

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