Euro dropping this morning as the dollar has strengthened - what will it mean?

Here's the euro dropping as the dollar strengthens from the Fibonacci pivot I've described. I will review in more detail this weekend. The big questions are will this continue? (and I think the answer is most likely yes) ... and what will it mean for equities? The second question will be quite interesting as we see whether it's part of a deflationary pattern that is bearish for equities, or will it just be a cross current event among the various countries' equities indices. For now, I would not be complacent about the impacts for US equities markets, so we'll keep an eye on how they react around the key levels they are testing too.

Notice that the euro also looks like this could be just a kissback test to the 142 level on my euro chart, below. One might argue similarly on the dollar chart (see UUP, the ETF, chart at right). Only thing is that these represent movements back from key Fibonacci levels, and the indicators are telling the theory that this might have further to go. Of course it will take follow-through and moving past the next set of swing levels to get more confirmation.

UPDATE - Andy Askey posted another great Gann analysis at his PTV-Investing blog, this one involving the dollar - US Dollar At Potential Support (8/6/09).