Stocks and Dollars

The Fed shifted to a slightly more cautious tone and downgraded its growth forecast. US growth dipped below 2% in Q1 11 but should recover in Q2 11.

Bond yields in Greece continue to soar as speculation over a Greek restructuring intensifies.

The growth impact from the earthquake was larger than expected

The historic FOMC decision and press conference came and went this week, for the most part we got the same statement as we had in March, with a slight more emphasis on inflation.

Fed Chairman’s performance came through “dovish” as he reiterated the need to keep rates low. We did see

The headline event for this week was the FOMC statement, which was followed by the first ever press conference. Fed Chairman Ben Bernanke signaled that the Fed could maintain a near zero percent interest rate policy till the August 9th meeting or possibly later. The Fed also confirmed that it

Treasuries put in their best performance in eight months during April with 10-year yields sliding by 17 basis points while two-year yields fell more aggressively by 20 basis points. The Fed said it wasn’t thinking about ending its extended period of low interest rates anytime soon as it lowered the

Higher inflation in Europe pushed the EURUSD to a high of USD1.4877 on Friday, and the single-currency may appreciate further ahead of the European Central Bank interest rate decision in May as investors anticipate seeing higher borrowing costs over the coming months. The Euro-Zone consumer price estimate increased at an

The GBP/JPY is declining as anticipated after a 3-wave rally that appears to have been a gartley retracement pattern.

The bearish scenario is contained within the rising channel, and will open up further with a break below the channel, and 78.6% retracement at 134.70 as seen in the 1H chart.

The bullish

This week the dollar continued to lose ground against almost all currencies, as even before the Fed’s interest rate decision on Wednesday, it had already been clear that US monetary policy would remain accommodative for a long time to come. This was confirmed by Ben Bernanke at the first press

The GBP/USD is in a correction after breaking above a flag pattern seen in the 4H chart. The target after the current correction is 1.6870-1.69 and the 2009 high of 1.7040.

The correction from 1.6750 is in a 3rd wave. If we use a wave a=c analogy, we have a projection