Thursday, July 9, 2009

Currency Charts - Euro & USD

These two charts look identical. Both now have developed a bullish pennant that looks ready to break out to the upside.

I wish it were the case, particularly for the US dollar bulls. But the bottom chart is UUP, an ETF that tracks the US dollar index, flipped horizontally and then flipped upside-down. The top chart is FXE, an ETF that tracks Euro.

It looks just a matter of time, probably very soon, till we know which way these pennants break. The safe (and usual) bet is that they will break to the existing trend - up for Euro, down for US dollar. If that happens, Euro is set to retest the recent highs, US dollar is set to retest the recent lows.

Commodities may benefit (since they are still priced in US dollar), but not sure about the stock market.

1 comment:

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