Euro CurrencyShares Buyable on Important Upside Breakout

Travelers to Europe this summer, myself included, are going to experience sticker shock even more severe than what we felt last year.

Currency watchers know that Tuesday's dollar weakness re-invigorated the Euro'sc ascent against the USD, helping it travel to new highs yesterday above $1.51. What they might not realize was how important the breakout was on the basis of Point & Figure charting; the move through $1.50 constituted a triple-top breakout, one of the most powerful and reliable patterns under this style of technical analysis. Thus, look for the Euro to go higher, ultimately toward the $1.60-range.

After consolidating its move from the previous leg up, yesterday's break at 150 ends the guessing as to whether the U.S. dollar was forming a base in recent weeks: the Euro's upside breakout says that it wasn't. Further, the Euro's weekly momentum just turned positive, as well:

Investors can very easily play this break with the Currency Shares Euro Trust (FXE) for a trade and as a USD hedge. And when compared to other foreign currencies, the Euro continues to come up at the top of my currency matrix.

Disclosure: Author holds a long position in FXE

Comments

[01GTvert]

Excellent news.....ARe you guys aware you can go to your local bank and literally BUY euros? Granted there's a small transaction fee but with the way the euro is moving towards the dollar there's money to be made in the transition back to dollars. At the very least it's a way to protect wealth than just sitting in a savings account.