Thursday, June 10, 2010

Euro strength raises questions whether it can stage bullish reversal

As promised (at least if you've been my posts here) the euro is trying to stage a bullish reversal from its test of the monthly chart Fibonacci 50% retracement level near 121 $XEU (see my charts below). The daily chart displays the positive divergence that's helping right now. The monthly chart shows the negative situation that really can go either way! My sense is that resistance lies at 123 to 124 on the $XEU chart. Past that, and there are still higher levels in the 130's that can stall the euro. So it's most likely one day at a time! At least we are getting the attempt which is giving a consolidation bounce that can (although not guaranteed) make a reversal.

I really do think it can go either way. Like the stock market. Probably both have to get past whatever weakness we see next week (whether lower lows or higher lows). Then we can see how much bounce we get in July and August before the next big set of anxiety rolls in toward November (election woes time!).

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