Euro Rally After Trend Reversal Could Have Legs
MacNeil Curry, one of my favorite technicians, likes the Euro at these levels. One of the best in the business, Curry is head of foreign-exchange and interest-rates technical strategy at Bank of America/Merrill Lynch. We've discussed that the Euro vs the US Dollar ($EURUSD) has been positively correlated with Equities, so if MacNeil Curry is right, then the Santa Clause rally in stocks is to be expected.
From Bloomberg:
Dec. 1 (Bloomberg) -- The euro may extend its advance against the dollar after the 17-nation currency closed above $1.3382, according to Bank of America Merrill Lynch.
That level, about where the euro ended 2010, confirms a “near-term base” and a turn in trend, targeting $1.3678-1.3653 and beyond, said MacNeil Curry, head of foreign-exchange and interest-rates technical strategy at the unit of Bank America Corp. in New York.
A daily close above $1.3678 would open up the euro to reach $1.4248, a level last reached in October, Curry wrote in a research note published today. Falling below $1.3382 would indicate a false move, according to Curry.
On October 26th, we mentioned that Euro weakness was telling us that something could be wrong with Equities. Sure enough, the S&P500 peaked the very next day and lost 10% over the next month. If we want to know where stocks are going, we have to be watching the Euro.
Source:
Euro May Rise in Trend Reversal, BofA Says: Technical Analysis (Bloomberg)
Tags: $EURUSD $FXE $SPY $ES_F