FYI for this week: "Put the U.S. Dollar on your radar screen".

Zhang Jianhua, the head of research at the People's Bank of China is getting very nervous now.

His concern? The U.S. Dollar and the $1.15 trillion of U.S. Treasuries that China owns. His specific concern is that the U.S. Government's debt could run into payback trouble which would cause a spike in Treasury yields.

On the other hand he said that he was, "otherwise confident that demand for U.S. Treasury's would stay healthy due to lack of investment alternatives, if nothing else". That's great, but hardly reassuring.

So, today update is an FYI warning to put the U.S. Dollar on your radar screen because if the Dollar falls through the support on today's chart, the U.S. Treasury yields will spike up and rattle the markets.

No ... it is not a problem yet, which is why this is a FYI (For your information notice) at this point.

So here is what you need to know for now:

If the Dollar falls below 71.31 to 70.82, then trouble will be knocking at the door. At such a time, Treasury yields would rise, and foreign investors would be concerned about holding U.S. investments.

Last Friday, the (USDX) U.S. Dollar Index closed at 74.09 which was 3.75% to 4.4% away from the support levels. At the same time, there are some positive divergences setting up which could cause an upside bounce in the Dollar. Danger for the Dollar is more likely to occur later, rather than sooner. But in any case, the Dollar should be on your radar screen the rest of 2011.