Lately, the euro remains elevated as the dollar is weakened. Europe will need a weaker euro to help the manufacturing and export industries recover. Thus, an LTRO 3 may be on the table which would send the euro lower and dollar higher, and would likely pump the equity markets. Regardless of all this political drama, the charts favor a lower euro moving forward. On the bull side, the weekly chart shows a Cup and Handle (C&H) pattern with a break out at 1.36 which would target 1.51. This outcome would be in concert with the dollar being crushed. However, the indicators are not enthusiastic with stochastics overbot and negative divergence in place or developing. The weekly chart is hinting at more of a resistance ceiling occurring at this 1.35-1.36 level rather than the C&H break out.
On the daily, a red rising wedge is in play with overbot conditions and negative divergence in place, all wanting to spank down price. Note how the small wedge has space available in the apex so a jog move may occur in coming days, down, then up, then down again, to place a top at this 1.35-1.36 level. The purple dots show price extension above the MA's which will require a reversion to the mean. Short euro trades, such as the 2x inverse ETF EUO may be considered as plays moving forward. Draghi's words are very important for the euro in the coming hours. 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.