Big move in the currencies this week. The Euro, British Pound and Japanese Yen all cracked – and the US Dollar Index shot up. Having spent the last 5 months in a large congestion zone, looks like the currencies are resuming their longer term trends.
The critical level on the Euro was $1.13 (on the futures) and Thursday’s selloff gave us a nice “falling through the ice” pattern.
Why did the Euro crash? Well, “the chart said so” is the short answer. Longer answer: more QE in Europe and capital flowing out of Europe and into US equities. Europe really is a basket case right now. Whether you think the flow of immigrants from the Middle East is a good or a bad thing, it is the issue that will rip Europe apart. And who would or could invest long term capital with that much uncertainty.
Good luck with your Emini trading next week.