/E7 (Euro futures) has hit T2 (second price target) followed by the typical reaction so far. As support, once broken, becomes resistance, the most likely end-point for this counter-trend bounce in the Euro is the first target zone of 1.2153-1.2194. Should the Euro reverse soon & take another leg down towards the T3 zone (1.952-1.1922), that will most likely correlate with another leg down in Euro/Dollar sensitive assets such as equities, crude oil, industrial commodities, and possibly gold (although at times gold will rally when equities fall as a flight-to-safety trade). Previous & updated 60-minute charts of /E7 outlining the breakdown & reactions off each target so far posted below.
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- E7 60m Dec 5th
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- E7 60m Jan 8th
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- E7 60m Jan 14th
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- E7 60m Jan 19th
The chart below highlights the very tight positive correlation between the Euro and the US stock market (which is also inversely correlated to the US Dollar).
SPY vs FXE 60m Jan 19th