XEU Euro Daily Chart Bollinger Bands Gaps

The euro runs the show. At the market bottom yesterday around 10 AM, the euro started upwards first. Up euro = down dollar = up commodities = up equities. Whichever way the euro moves, the broad indexes follow.  Once price violates the outside BB it typically moves back to touch the middle BB, at a minimum, and also the opposite BB. The September upper BB violation led to a move back to the middle BB, then back up for another upper violation, then down to violate the lower BB in early November as the markets were selling off, now recovery again with price a stone's throw away from the upper BB again.  The euro is 1.2989 as this is typed.  The gap from late October remains unfilled and this is exactly at the upper BB level as well, at 1.3020-1.3040. The indicators are long and strong and want to see one more price high as compared to the high from three days ago at 1.2990-ish. This morning's print is already satisfying this goal. The euro will likely print a high in the purple circle today or tomorrow, this will occur in concert with the indicators rolling over, losing the long and strong profiles shown, in favor of negative divergence.

Note how the moving averages are lining out sideways now which hints at sideways action ahead for the euro. In general, the euro has been moving sideways thru the 1.2700-1.3100 channel for three months. In September price jumped up thru the gap at 1.2650-1.2700 creating an island that they euro has been living on ever since. At some point, price will come down for a potential island reversal, which would drop price thru the gap as fast as the upside move occurred. Key support levels are identifed. Of special interest is the 1.3020 (satisfies the gap fill and upper BB touch), 1.2960, 1.2913 (50-day MA), 1.2820 (confluence of the 20-day MA which is the same as the middle BB, the 200-day MA and horizontal support), 1.2780, 1.2700 (island bottom) and 1.2640.  Projection is up for a day or three to 1.3030-ish, then reversal back down. Watch to see if negative divergence forms. The euro is now printing 1.2991. 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.