XEU Euro Index Daily Chart Two-Leg Bull Pattern Negative Divergence Gap Fills

XEU Euro Index will receive lots of attention in the coming days. Portugal received a downgrade today and the big question is will Trichet balk at producing a rate hike or will his bluster cause him to raise? The euro is trailing off the last few days but the hesitancy in moving down more tells you that many traders believe Trichet may raise. The two-leg bull flag shows a move from 129 to 138, or 9 gain, then after the consolidation, the second leg started up from 134, thus, 134+9=143 target. Price printed a smidge above 142, enough to now create negative divergence compared to the November high, but I will leave it up to you to decide if the euro needs to see 143-ish, or if you consider the bull flag pattern to be satisfied.

Lots of gaps down below that will require filling with interestingly, one tiny gap above at 142. So a spurt to close any open business above would open a solid door to the downside. The ADX shows how strong the price trend was when the euro climbed in the Oct-Nov period, but this recent near three month rally is not strong trend-wise and negative divergence is in place now. The chart says Trichet balks, I guess we'll find out any day now. Projection would be a lower euro moving forward. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.