Yesterday the Euro/US$ closed above its daily key reversal level and is now officially in rally mode.
It still needs a weekly close above 1.3188 to get into bullish status again.
The Euro could be pointing the way forward for several other markets as well.
E.g. gold has been moving up and down with the Euro in recent months, so if the Euro rallies further, then look for gold to get into rally mode as well. Gold has failed to close above its daily key resistance so far this week, but I would expect it to break out to the upside if the Euro continues to go up.
The US stock markets have done just the opposite, they have been going down whenever the Euro went up since February. So, if this negative correlation continues, then a further rise in the Euro would mean new downside action in the stock market.
So, that’s several good reasons to keep an eye on the Euro, even if you are not trading currencies.
Stay tuned,
Danny
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