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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About Jay Norris

Jay Norris is Director of Education at Trading University, has over 30 years of trading experience, and is the best selling author of "Mastering The Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill, 2011. He has also been published multiple times in Technical Analysis of Stocks & Commodities magazine.

One Response to “Euro Barely Hangs on to Primary Trend”

  1. “Euro Barely Hangs on to Primary Trend” – understand.