In a world of low volatility, EUR/USD's jump in the last 24 hours is impressive.
But it's not big enough to change a clearly defined downtrend, and it's prudent to see this as a correction only.
The pair has reached a significant resistance level representing the first real test of the will of traders, and it is a level where shorts must be considered .
The one-sided bias of speculative betting has provided much of fuel for the rise and a bigger rise is plausible given those positions, but a move into bets on a rally is unlikely IMM/FX.
Even the number of shorts, large compared with recent extremes, is small compared with bets made in the euro zone crisis.
Changes in bond and money markets are negligible, representing froth off the top moves for bond yield spreads and forward swaps.
Should the Fed match expectations to slash interest rates 50bop this year, the dollar will still be the highest-yielding major currency, by far.