 For the second part of this update, I'd like to talk to you a little bit about a question that was put to me at the weekly webinar on Monday by one of our clients, and he said to me, how come the euro is so well bid given all of the negative headlines about Greece? And I think that particular question that speaks to a common mistake that people generally tend to make when there's an awful lot of what I would call headline risk. People look at the headline risk and automatically assume that because of that headline risk, we're going to see a significant amount of either strength or weakness to a particular currency pair. When in reality, the market has already been pricing in that headline risk for quite some time. The mere fact that the risk is being ratcheted higher presupposes the market is going to react to that. And that's not necessarily the case, because in terms of foreign currency pairs, you always have a push-pull effect in the fact that while you've got a negative factor sort of weighing on the one side, you've got a potentially positive factor pushing on the other side. Okay, so what I mean by that is the negative effects from a potential Greek exit are being outweighed by uncertainty created by this week's FOMC meeting, which is actually causing a little bit of a drag on the dollar side of the euro-dollar equation. So in that context, it's very important that you don't trade the headlines, you trade the price. And this is where the charts come in. So let's look at this four-hour chart on euro-dollar. So we'll look at this four-hour euro-dollar chart and we can see the trend line that I've drawn from the lows in the middle of April. And we can see that we're quite some way away from that support line. We can also look at the significant resistance areas around about 113.80, 114. What's more important though is that horizontal line that I've drawn right through the middle of the chart. And we can see that that 110.50 level is a significant, what I would call, turning point in terms of when the market goes up, turns around, goes down, turns around, goes up again. And I've highlighted the instances on this particular chart where the market has acted as a significant support level. As you can see from this chart, over the past month, despite all of the headlines with respect to Greece, we've gone pretty much nowhere. So negative headlines surrounding Greece are nothing new. So really it's a question then it's more of a dollar story than a euro story. So which brings me on to the US dollar side of the equation. And this is a four-hour chart of the dollar index. And we can see from this chart that since the end of May, beginning of June, the dollar's been in a downtrend. And given that 55% of the dollar index is comprised of euro, we know straight away that the euro is going to have a disproportionate effect on what the dollar index does. So we can see from this chart here that the dollar is under pressure. The dollar's under pressure because of potential rate expectation, rate rise expectations from the FOMC, the will they won't, they raise rates this year or will it be next. And as such, investors are pairing back interest rate expectations for this year. And that's putting pressure on the dollar. The flip side of that, it puts upward pressure on the euro. So when you're looking a euro dollar, it's also important to look at the dollar index to see whether or not the two charts confirm the overall direction of the dollar. Now this is where it gets a little bit complicated because now we have to look at what US bond markets are doing with respect to interest rate expectations. And the best benchmark that I generally tend to use is the relationship between German bond prices and US treasury prices, US 10 year treasury prices. And you have to go back to what I've said in previous videos about prices and yields moving inversely to each other. Now we saw US 10 year yields hit 2.5% earlier this month which meant that prices hit a significant low point given the fact that if yields hit a very high level prices hit a low level. Now this daily candle chart on the US 10 year treasury would appear to suggest that yields on US treasuries have topped out which means that prices are bottomed. With this daily chart that we've got in front of you right now I've circled the candle in question. There is potential that we could have bottomed in prices in which case we could see yields come down and as such that then reduces the attractiveness of the US dollar. Now if those differentials narrow between bond yields and treasury yields that essentially makes the euro that much more attractive. So this is why tomorrow's FOMC meeting is quite important in terms of the tone of the language that we get from the press conference on Wednesday. Now Colin and myself will be doing a webinar at 3pm UK time where we'll do a little preview of tomorrow's FOMC meeting. We'll also expand a little bit about what I've just gone over with respect to what to expect from the bond markets and we can see from the chart that I've just shown you that there's significant resistance around about 1 at 2650 which if we break above we could well see yields come lower. If yields come lower then that could undermine the dollar. So assuming that I haven't completely flummoxed you with respect to all the linkages that I've drawn between the euro dollar the dollar index and the US tenure note that's it for this week. If you want to learn a little bit more about the interrelationships between the various markets please feel free to log in to the webinar on Wednesday at 3pm. Until then this is Michael Hueson talking to you from CMC Markets.