ETF CORNER

FXE : Intermediate term top in the EUR/USD !

I wanted to elaborate a little more on the chart I came up with yesterday regarding the EUR/USD. This recent rise from $1.18 to $1.40 went much higher than most would have expected. What's interesting from a contrarian point of view is that not too many of us would expect the EUR/USD to fall down to the $1.25 area in the next two to three months. I'm bringing this up because we had the same exact situation  in late 2008 when the EUR/USD rallied from 1.23 up to 1.46 in a matter of 3 months. The EUR/USD had retraced 61.8% of the initial drop from $1.6050 down to $1.23. What interesting to see now is that the EUR/USD has retraced 61.8% of the last big drop from 1.51 down to $1.18.

The question is : Are we going to repeat ? 

With most technical and sentiment indicators screaming "get the hell out of the Euro" I would start to anticipate a sharp move down.. sharper than anyone would expect !

FXE : Euro rejected at my key resistance.

I showed the key resistance level at $1.38 on the EUR/USD on the last post (Click Here) . It seems that it has worked well so far in halting the Euro's ascent. I think that's it's reasonable to see a pullback of at lest $1.3350 in October.

 

FXE : It's Grease's fault !!!!!

The EUR/USD (FXE) is being sold off since early december 2009 ! Could this be all due to the economic turmoil  in Grease ?? All i know is that this sucker is attemting to hold on this fibonacci retracement !!I believe that in the medium term .. the 1.38 area should be within reach ! EUO (Double short FXE) is doing quite well so far ...

FXE : When will the Euro stop rising ?

The rising Euro/Usd is a concern ! When the Euro rises,Oil rises and Gold rises. The US consumer must pay higher energy prices and his purchasing power abroad melts like ice cream under the sun in the Saharan desert !! I made a post yesterday about a possibility of another higher leg in USO. A break of the Euro above $1.49 could trigger another rally in Oil prices and USO could reach $45 ,while the Euro could rally up to $1.53 (green scenario) ! On the other hand if the Euro fails to break above $1.49 this week,then the rally in USO will be in jeopardy, as well as the rally in stocks (blue scenario) !  The Euro holds the key here !!

Related ETF's

EUO : Double Short Euro ; ULE : Double long Euro ; FXE : Long Euro