Euro Barely Hangs on to Primary Trend
As weak as the Euro’s been since spring against the U.S. Dollar – down approximately 12.8% from the May ’11 high – the primary trend according to Dow Theory for this currency is still higher, barely. Approximately 129.25 marks a line in the sand of sorts for this currency with a weekly close below that level needed to shift this influential pattern lower. Still hard to be bullish however given the majority of tradable patterns are lower – see chart.
No doubt central banker support of the Euro currency can play a role going forward – a falling currency means loans which do get paid back are done so in a devalued currency which only exacerbates the problem – along with short covering from players who are overloaded on the short-side because overbearing press coverage of the E.U.’s deep-seeded problems. From a trader’s perspective the Euro remains a market to follow to sell rallies and/or sell break-downs.
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