US bond yields up, EUR down - eye on risk currencies such as the AUD

Oversupply and diminishing bond values with high yields will ensure that stocks and risk currencies will start to show further volatility.

The amount of debt both corporate and goverment coming onto the market should be a concern as financing through bond sales may be harder to obtain.

The EUR (Euro) has come under immense pressure form selling more so on the whole European situation rather than just Greece. The major concern is if the EU agrees to a bailout, then other countries in worst situations such as Spain start asking for EU intervention. The EUR currency should just about be killed.

Even on IMF intervention, would indicate to the market that an official 'bailout' has been requested outside from the EU. Either way a sell on the EUR will continue.

The EUR should continue it's fall to 20th April 2009 lows of 1.29.

Slightly oversold via the KC channel on 21 trading days a very slight rebound could occur.



In contrast to the EUR, the AUD is looking very overbought in rangy markets conditions, extremely vulnerable to USD, high US bond yields, China issues and EU issues; all will effect the AUD in a dramatic way. The AUD is currently a sell falling now into the middle channel of the KC channel and about to fall below the 50 day moving average (in blue). A low of 0.85 is very possible and a break below stops/supports could also occur. All depending on 'worst' news from the global ecomomy.