The Euro Needs a Catalyst

The Euro has had a rough road in the press with all the concern about the situation with the European economies. Austerity, dissolution, broad economic woes, it should be all over the map. Yet it has traded in a fairly tight range since March. The chart below shows that is when it completed an AB = CD pattern move. It has been in a descending triangle since, with a base at 130, and spending a lot of time at the 38.2% Fibonacci of the major move lower from 2009 to 2010. At about 2/3 of the way into the apex this is the prime area for a move from the triangle to be powerful. A break out would expect a 5 handle move or to 125 on the downside, below the January low and the 23.6% Fibonacci. That move to the upside would take it beyond the 1.35 top at D and the 50% Fibonacci. Either would look like a new longer term trend. With all the news what could be the catalyst? Calm.

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