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