Great Graphic: Euro Price Action

The euro was sold to almost $1.0855 before recovering back above $1.09.  The Great Graphic, created on Bloomberg, shows a three-point trend line in the euro that has been violated.  It comes in now near $1.0930.    A move above there opens the door for a return toward $1.10.  

On the downside the low from May near $1.0820 is an obvious objective.  That could be the neckline of a potential double top (May and June).  A break of that neck line would give a measuring objective of around $1.02. 

It is the issue of much debate how much the Greek saga has been a weight on the dollar.  The linkage between the euro and bunds also appears to have weakened.  The divergence meme has been underscored by Yellen (and other Fed officials) and Draghi's confirmation that QE will continue.  Moreover, he did claim that purchases were stepped up in May and June (and a little less in July). The divergence meme also explains the under-performance of the dollar-bloc currencies and Scandis, as well as the relative strength of sterling.  


Great Graphic: Euro Price Action Great Graphic:  Euro Price Action Reviewed by Marc Chandler on July 16, 2015 Rating: 5
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