EUR/USD (a 4-hour chart)
The U.S. Treasury bonds yield more than from the annual maximum fell. Although the majority of investors still believe that the upward trend is not broken, still the U.S. currency backed off on Wednesday.
The decline of the U.S. currency was most evident against the Swiss franc and the yen by more than 1%.
Steven Englander, said that the weakness of the dollar was due to the fact that the positions were closed in all directions and Treasury yields fell.
According to the latest data it became apparent that the Forex speculators increased the long dollar positions to the highest level, at least from June 2008 for the week ending May 21 and. These actions helped to create a potential reversal as investors decided to lock in these rates income.
According to Englander the dynamics is likely to show that the U.S. currency is stable or fall at a moderate pace, as the major players continue to hold long positions on the dollar. It is quite possible that the dollar will rebound as soon stabilize asset markets.