Has The Euro Topped?
Surf City | Aug 31, 2017 12:06AM ET
It looks like the euro may have indeed peaked, at least in the short term. Based on my recent USD update, I am still looking for a 5-6 month ICL in the USD. The dollar has rallied hard off Tuesday's low and as you would expect, the euro is showing signs of topping here.
Remember that a rising dollar is not always bad for gold and PMs. The negative correlation is there from a percentage standpoint over time, but for much of this year, gold has moved in tandem with the USD, at least for a good portion of the time.
I have taken a trade in shorting the euro with the ProShares UltraShort Euro ETF (NYSE:EUO), but have not yet made this a portfolio trade as it is risky. However, here are some charts for both the euro (XEU) and EUO.
Remember that all my currency charts are from EOD yesterday. My first three charts are of the euro (XEU). The very first is a close up showing what looks like an early top on day 8. The 2nd is a one year daily and the 3rd, an 11-year weekly showing that it is struggling at the 200wma.
My last chart is an EOD USD chart showing the strong two day bounce that recaptured the 200wma so we may well be witnessing the long awaited ICL I have been looking for.
My last two charts are on the EUO ETF which shorts the euro. Talk about catching a falling knife. Wish me luck.
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