Hi everybody, how are you? after hitting a two weeks low against European currencies, market continues highly volatile and greenback is making big progress all across the board, as yesterday The Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank said they were taking action to alleviate pressures in the U.S. dollar funding markets; besides,U.S. Treasury Secretary Henry Paulson had discussed a government plan to fix the troubled financial sector by establishing an entity to handle bad debt, modeled on the Resolution Trust Corporation of the late 80s which was set up to resolve the Savings and Loans crisis. At this point, saying that sentiment is driving the market, sounds like a joke: is clear that major forces are in fact on charge; the dollar fall these last days, on financial turmoil and stocks drop, triggered a bullish rally against it, and seems that authorities don’t want to come back to were they where: expensive currencies, inflation pressures, unemployment, negative readings in both internal and external sales, etc. And by authorities, I mean the rest of the world ones: is clear that a stronger dollar, (let’s not forget a cheaper oil) will be in a world wide positive perspective. I don’t expect greenback to continue strengthening much further, yet seems to be very close to it’s equilibrium point at least against European currencies, unless until next crisis
There will not be more fundamental news today, but some action could be triggered by the U.S. opening 9:30 East Time.
I’ll be back in a few minutes with today’s technicals.
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