Everywhere I turn all I hear is Euro this Euro that. How many countries are leaving the Euro zone? Almost like if it’s assumed that someone’s leaving, and all we’re concerned with now is who and how many? Not if we should short the Euro, but how aggressive should we be?
There are some important resistance levels that I’m looking at right here on the US Dollar Index. Remember that the Euro is by far its biggest component. I’m finding it really hard to get bullish on the Dollar when I look at this chart. We know that the long-term trend for the Dollar is to the downside (not a secret). So if I’m going to be wrong, I’d prefer to be wrong in the direction of that underlying trend.
Sam Stovall today:
“From a contrarian viewpoint, the extreme bullishness toward the dollar, and bearishness toward the euro, suggests to us that these currencies are closing in on a major reversal of fortune, which could be bullish for stocks,” said Sam Stovall, chief equity strategist for Standard & Poor’s.”
For now, I don’t buy this Dollar “breakout” and would caution those looking to get long here. Remember that from false moves come fast moves – in the opposite direction. Buyer beware.
$UUP $DX_F $FXE $EURUSD