XEU Euro Daily Chart Sideways Symmetrical Triangle ECB Meeting 7-7-11

XEU euro daily chart shows a sideways symmetrical triangle squeezing things sideways. Trichet was instrumental in bouncing the commodities and equities markets the last couple days since he released a communique implementing his 'strong vigilance' words which means he plans on hiking rates come the 7/7/11 ECB meeting. Once he announced strong vigilance, the euro took off to the upside and the following asset relationship plays out; euro up=dollar down=commodities up=equities up=treasury prices down (yields up).

Thus, Trichet is a big part of the reason markets ran up this week and the media gave it little attention. Trichet promised a pony (rate hike) so he better deliver a pony in four trading days, otherwise, the euro will plummet. During the May downtrend move, the ADX was starting to show a strong trend in place, but once the euro bounced off the lower rail, there has been no strong trend for the last five weeks, price is simply moving out to the apex of the triangle along with the MA's.

The euro is going to break hard out of this triangle in the following days, the ECB meeting next week will probably be the climax. Note the hanging man candle printed today indicating a potential trend change, which would bring price down a bit to keep it in the triangle until next week. This chart is not tipping its hand, that is the nature of a sideways symmetrical triangle pattern, but, considering the weak weekly chart, the euro should move lower. Sometimes the intial move out of the triangle is a fake out so you will not know the official move until Friday, 7/8/11, and do not be faked out if you see price sneak above the top rail in front of the ECB meeting.

Watch to see if the 20 MA stays under the 50 MA, bearish, and if the RSI and stochastics fall under the 50% level, which would pave the way for the downside. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.