The EUR/USD is taking the opposite route as US Dollar is re-rating with GFC fallout. It's strong rebound has been fueled by Global Equity Panic Selling, BEWARE of Month-end Rebalancing.
The European Sovereigns are largely intact and very strong too. There is a very high probability that European High Yield will surpass the Nasdaq in the next couple of weeks.
Oil sector is now reversing as world news has scared investors in the Euro/US Dollar, Euro/Chinese Yuan and Euro/Japanese Yen. Ex-FTSE 100, ex-N.M.Nets, ex-AIG, Ex-BP are very far from a bounce. It's doubtful that the European Sectors can overcome Oil Sectors once they have repeated performance during next month.
EUR/USD now trade at, ! USD 2442.25 and EUR/USD All were in danger of double digit closing support.
As soon as people see past performance this month, re-rating will come back into play. It is time to be very alert about the trading environment.
The European Sovereigns were all doing well but now it's clear why the EUR/USD is doing well and this is because of GFC; Eve happened, Re-rating took place, Eve reset, Eve corrected and Eve reset again. The previous Eve was an enormous psychological event and now the re-rating has happened and nobody is going to look back and wonder why the Euro is rising.
In previous days the EUR/USD were trading close to its all-time highs and now they are trading at triple-digits. This is due to Global Equity MarketDisruptions which have been re-rating all markets in the previous month.
People are now scared because of what happened to the world and global equity markets during last month. Eve happened, Re-rating took place, Eve reset, Eve corrected and Eve reset again.
To understand why the EUR/USD is now climbing, you need to understand the nature of Global Equity Markets. GFC affected all Markets in similar way. Now it's clear why the EUR/USD is climbing.
The EUR/USD is now much higher, because that's the way it happens. GFC cost EUR/USD as well because it cost all markets in the same way.
GFC also destroyed confidence in investors and they stopped buying GBP/USD, because they were afraid that the market could collapse and they would lose money. Eve happened, Re-rating took place, Eve reset, Eve corrected and Eve reset again.
Now the EUR/USD is climbing because Eve happened, Re-rating took place, Eve reset, Eve corrected and Eve reset again. Investors are scared and is the same with stock and fixed income markets. The over-valuation of the stock Market is massive, and fixed income markets, it's just too high.