Thursday, January 06, 2011

Euro Currency Shows Its Hand





Above is a daily chart of the ETFs representing the Swiss Franc and Euro Currencies. You'll notice that these two markets tend to trend together in the same direction and are positively correlated.  Over the past few weeks  a bearish divergence has taken place between these two currencies. As of last week, the Swiss Franc went on to make a new swing high but the Euro  has not and is making lower highs. This in my opinion is bearish for the Euro and I expect to see further weakness in the weeks to come. My downside objective for the Euro is a test of last summer's lows.

2 comments:

Anonymous said...

Kevin

It looks like the EUO is flashing buy. Is this an easy way to play the expected trend?

Kevin said...

I agree

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