This would almost certainly be bearish for US stocks short term and would drag down the price of commodities as well. Just stalking this trade and not saying it will confirm itself, but it is worth watching.
Wednesday, June 10, 2009
Euro Head and Shoulders Reversal
I was looking through my currency charts and noticed a nice little ugly head and shoulders possibly developing in the EUR/USD 60min chart going back the last several weeks. With the Euro trading around 1.403 as of right now it is still forming the right shoulder of this pattern so it is not yet confirmed. The neckline is right at 1.38 even and the previous high last week was a smidge over 1.43 so a measured move could take the Euro to 1.33 or down 500 pips or so IF it breaks down below the 1.38 neckline.