Don’t Forget the Euro, It Gets Jealous!

• Posted by Greg Harmon
• on May 22nd, 2013

The Euro seems to have taken a back seat the last couple of weeks. First the BOJ manipulated managed their currency leading to a soaring stock market, then the shift recently towards whether the Fed will or will not be exiting QE Infinity anytime soon, have taken center stage. Well the poor Euro does not seem to like the lack of attention as it is setting up for a suicide dive technically. A quick look at the weekly price action of the Currency Shares Euro Trust, $FXE, shows 2 bearish scenarios setting up. The first is a Head and Shoulders pattern. A break of the neckline at 126.90 triggers a price

Currency Shares Euro Trust, $FXE

objective of at least 117.25. That level has not been seen since December 2005. Now that should get some attention! It has support for a continued run lower from a falling Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is falling. The second scenario comes from the Andrew’s Pitchfork set up. It shows a continuing move towards the Median Line and if that previously mentioned Head and Shoulders triggers, that should attract it lower. So keep an eye on the Euro for a few days.

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