or from the perspective of his twin sister the EURO....
We are at a crirical juncture that indirectly affects the entire risk trade and also the question of how much longer the Bull can run.
A weak Dollar (=strong Euro) drives the 'RISK on TRADE' thus a strengthening of the Dollar as obeserved by the falling Euro over that last couple of days (sell the news on the LTRO II & Bernake's: No QE3) could trigger a more severe correction.
The Euro chart offers some reference points to better gage the picture:
see (1):
This was the expected target of the Euro up-move into the high 1.35+ area which can still be reached if we bounce of the supporting trendline (2)
see (2):
key trendline that will determin whether the Euro strength with end next week or whether we will see another run at the target price zone (1)
see (3):
RSI support level for the Euro strength of the last months, which stands around 45.
SUMMARY:
We are at a crirical juncture that indirectly affects the entire risk trade and also the question of how much longer the Bull can run.
A weak Dollar (=strong Euro) drives the 'RISK on TRADE' thus a strengthening of the Dollar as obeserved by the falling Euro over that last couple of days (sell the news on the LTRO II & Bernake's: No QE3) could trigger a more severe correction.
The Euro chart offers some reference points to better gage the picture:
see (1):
This was the expected target of the Euro up-move into the high 1.35+ area which can still be reached if we bounce of the supporting trendline (2)
see (2):
key trendline that will determin whether the Euro strength with end next week or whether we will see another run at the target price zone (1)
see (3):
RSI support level for the Euro strength of the last months, which stands around 45.
SUMMARY:
- We either cut through (2) and (3) and will start the beginning of the RISK unwind trade
- or we see a bounce back to (1) around mid March 2012
- which can gain more upside momentum later on
- or retest trendline (2) again
No comments:
Post a Comment