Thursday, December 19, 2013

XEU Euro Weekly Chart Negative Divergence

The euro appears to have reached a near-term top. Europe will be happy with a lower euro since it will fuel the manufacturing and export industries and help them pull out of the recession and depression. A lower euro will be in concert with a rising dollar. The dollar is up after the Fed's decision yesterday. The interplay between the euro, yen and dollar continues. The dollar/yen spikes higher on a weaker yen and stronger dollar. The chart above hints at a continuing roll over to flat sideways move ahead perhaps through the brown channel. The indicators are weak and negatively diverged (red lines) showing no interest in price moving higher. The euro is at the upper standard deviation band again as well so another move to the middle band and perhaps lower band is in the weeks ahead.

There are many inverted H&S scenarios off the bottom that can be drawn but the euro does not appear agreeable to moving much higher. The expectation is for a lower euro with an initial downside target at 135-136, with corresponding buoyancy in the dollar occurring.  The higher dollar should apply pressure on copper, commodities and equities. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.