XEU Euro Weekly Chart Rising Wedge Overbot Two-Leg Bull Flag Gaps

The major central bankers are printing money like there is no tomorrow as the race to debase continues. The euro is left at the altar, however, as the euro pairs are march higher and the euro gains.  This action is fascinating with the back drop of the Greece and Spain depressions and ongoing European recession. European auto sales are dropping as shown by recent data. Draghi will need to cut rates to weaken the euro to promote growth, however, the opposite is happening. Europe is standing pat so the euro is launching higher with this morning's print now punching up thru the important 200-week MA resistance at 1.3528. The euro has near term momo as shown by the indicators (green lines) and the RSI and MACD line are long and strong wanting to see a higher high after a pull back occurs.

Price now filled the gap at 1.35.  The blue and brown resistance lines gave way. Price is now entering the 1.350-1.367 zone corresponding to the brown and red S/R lines. A large gap exists above 1.367 where price would target a fill, or an island reversal may occur where price moves up to 1.365 and then immediately catapults to 1.380 in a heartbeat. The inverted H&S is plain to see and all the rage on the Forex desks. The blue line at 1.345 is the neck line, and, with the 1.21 head, the target is 1.48. It is very likely far too premature to consider this outcome. With price now thru the important neckline a back kiss to 1.345 would be in order.

The red rising wedge is bearish for price moving forward, ditto the histogram, stochastics and ROC. The neon blue two-leg bull flag is playing out right now. Leg one is 1.21 to 1.31, ten handles, then sideways consolidation with a lower bias, then leg two begins at 1.27, thus, 1.37 would finish the bull flag pattern. It is going the euro bulls way and as the euro goes, so goes the equity markets. Up euro = up markets. Watch the interplay of price across the S/R lines. Projection is a pull back but there is momo to the price move now so the euro should either move to, or come back up to, the 1.36+ test (red line). Watch the action around the 200-week MA at 1.3528. The stronger euro will crush Europe but Draghi does not appear worried. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.