The Euro, and Europe, spent a lot of time in headlines this weekend, as elections in France called the future of the fiscal pact into question, and polls in Greece offered a strong indication that the first exit from the Eurozone may be approaching.Â The daily chart indicates a more or less sideways pattern since January; is the stage being set for something more decisive?
Trend lines can help to reinforce visual impressions; the one in the chart above connects highs from Febrary, April, and May at successively lower (1.3486, 1.3381 and 1.3284, respectively) levels. The price action overnight stopped at almost precisely the 61.8% Fibo retracement level, so the uptrend is bending, and certainly looks like breaking, according to the criteria that Todd teaches.
If a new downtrend is to establish itself, a bounce nowÂ seems likely toÂ fade out by the 1.32 level; should that break to the upside, it would point to a return to indecisive range trading. One cautionary note; although we’ve had a fair amount of movement overnight, London does as much volume as New York and Tokyo combined, and it is closed for a UK holiday today. We’ll get a better sense of the market’s reaction to the weekend’s events tomorrow.
Best of luck!
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