As we anticipated, the move higher against the dollar resumed on Tuesday. This extended correction is technical in nature and we are still expecting a big resurgence in dollar strength over the next few months. There are some markets that haven't been correlating over the past few weeks/months, specifically the Yen, as it continues to strengthen to 2009 highs, while the equity markets continue correcting to the upside under struggling economies.
The DOW is forming a bearish head and shoulders formation and only a close above 10730 will signal a run towards the high set 4 months ago at 11200. With the EU and UK interest rate announcements up next, focus will be on Trichet's press conference.