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The Short Term Euro Direction Seems To Have Changed To Upward

|Includes:CurrencyShares Euro Trust ETF (FXE)

The EU has very slowly and painfully been coming to a resolution about the Greece debt problems. This weekend they agreed on a more concrete bailout package. They will float loans to Greece for up to 30M Euros at 5%. The IMF will provide another 15M Euros of loans at 5%. The Greek CDS spread rates are already down considerably in reaction to this news. This bodes well for the near term performance of the Euro. The FXE chart below indicates that a short term upward trending bottom may have been reached.

Click to enlarge

This could be the start of a bigger turn, although some economic indicators argue against that. Still it seems likely to be at least a short term move up of the FXE to the $137.50 level. The FXE is just passing through its 20-day moving average, and its 50-day moving average seems likely to be penetrated to the upside soon. We will all have to wait for further developments to try to predict much more. Pundits as famous as Jim Rogers and George Soros are saying the FXB should go down longer term (it has been rising recently). This likely means the Euro will go down in sympathy. I wouldn't care to argue with them without a lot more evidence to go on.

Good luck trading.

Disclosure: no postions at this time

Stocks: FXE