16 Aug Week ahead

on this lunar eclipse day, it makes sense to take stock of what is happening.

Weeks ago, China announced new policy to allow China companies to retain their foreign earnings overseas, and not to repatriate back to China into Yuan.

This would diminish the demand for Yuan, and hence the reduce the appreciation of the Chinese Yuan. However foreign funds pressed by the lack of liquidity has decided not to wait but to cash out of the market, by selling China Equities and China Real Estate, and repatriate the monies into USD. By rigging the USD higher, the funds manage to increase their returns relative to other currencies, e.g. EUR.

In one more week, the Olympics would complete. The next show would start.

Meanwhile the reptriated funds are flowing into the US markets, hence you see US Equities well supported.

How far would USD goes ? The easier part of the journey is completed, the more difficult part begins, with 1.4500 in view, and it would takes weeks if not month.

Do not expect a miracle with any substantial retracement, any retracement of Euro would be sold into.

Sell Euro 1.5000 (if there is any such retracement)

Euro is now in a Bear MArket, sell into strength.

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