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CurrencyShares Euro ETF Message Board

  • keybotthequant keybotthequant Mar 22, 2013 10:53 AM Flag

    XEU Euro Charts and Technical Analsis Bounce Now but Weakness to Resume

    The euro has tumbled a long way in a short amount of time for a currency but then again, the move up was equally as wild. Note the doji candlestick top that identified the trend change. The green circle is a gap large enough to drive a Volvo truck through and serves as a magnet for price. The 200-day MA at 1.2859 is critical support. Four days ago, price tested the 200-day MA, successfully, so price kicked in the positive divergence (green lines) and a jump up and out of the falling wedge occurs. The move is similar to AAPL's move recently. So the bounce in the euro is not at all a surprise, that is an easy call using the daily chart. But, now that a bounce occurs, what next? After all, there is space remaining in the apex of the falling wedge and also the 1.27 is critical and important support, perhaps price wants to take a look at these lower targets?
    Time to look at the weekly chart to spread the time frame out. The daily chart bounces price and some further buoyancy would be expected. Upside resistance occurs at 1.2950-ish, where it is now trading, then 1.30 R next. On the weekly chart, the rising wedge is shown. The 50-week MA at 1.2881 has held so use this as a key metric for today and into early next week. The indicators are all weak and bleak (red lines) wanting to see lower lows in price, and the 1.27 support is a logical target. The indicators on both charts hint at a potential sideways vibe moving forward. The blue channel may remain in place well into and through summer time. The projection in the near term is for a move lower to occur in the euro from the current levels now (1.2950-ish), or from 1.30, and a drop down to test the 50-week MA and 200-day MA should occur again, and then likely down to 1.27.
    This pending weakness in the euro should correspond to the broad equity markets moving lower as well. The 1.2880 and 1.2860 are major lines in the sand.

    For euro charts use search box above for Keystone Speculator.

109.04-0.06(-0.05%)11:32 AMEDT