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CurrencyShares Euro ETF Message Board

  • keybotthequant keybotthequant Dec 15, 2011 8:58 AM Flag

    Euro Chart Positive Divergence

    Price is bouncing due to the falling wedge, oversold conditions and positive divergence. The overall trend, however, remains down. Looks like a countertrend rally begins today.

    XEU Euro Daily Chart Falling Wedge Oversold Positive Divergence:

    Falling blue wedge, oversold conditions and positive divegence point to a bounce for the euro. Note the red cicles in early October that wanted to see a lower low in price, and now they have received that request. The pink boxes show that the down move in September was a strong trend, and to this end, the downside resumed again in November. The ADX is climbing again to indicate a strong trend for the euro down move again. The October up move was not a strong trend so that can be assigned as a countertrend rally.

    Lots of folks are short the euro so any positive divergence bounce now may then get fueled with short-covering so the move up may be quick and surprisingly strong. Key levels are where the hanging man and doji candles are at 134 and 129, respectively. If price bounces off the divergence as expected, watch to see if the 132 resistance is taken out to the upside, or not. Projection is for a bounce in price to occur now, but, moving ahead in the weekly and monthly time frame, the strong trend should resume with sideways to sideways lower prices moving forward. Lower euro=lower equities.

    For the XEU euro chart use search box above for keystone speculator.

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    • On the euro chart, XEU, FXE, ULE, the daily chart only wants a short term bounce now from the positive divergence.

      The only thing that would change his is an S&P downgrade of France debt which will slap the euro and equities down immediately.

      If/when a pop in the euro occurs due to the positive divergence, this will be relatively short-lived, and the weakness will reappear.

      The LIBOR3 chart shows that price is now at levels not seen since the summer of 2009. This verifies the high anxiety in the banking sector currently and verifies the continued weakness of the euro moving forward.

      For Libor3 chart use search box above for keystone speculator.

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