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ECB Could Be Catalyst For Euro Surge

|Includes: CurrencyShares Euro Trust ETF (FXE)

By Poly

The Euro Cycle topped on Friday as I had suspected was possible. In the weekend report I mentioned the Bollinger Band break that occurred deep in the Cycle timing as a key development. Unfortunately I was looking for a possible final surge into a top that did not develop. So with 4 days of flat to lower action, it's now clear that the Euro is seeking a DCL. I do expect this decline to be short-lived though because I'm looking for the Dollar to begin its waterfall decline into an eventual ICL. That's obviously not at all possible with a dropping Euro, so I expect the ECB meeting tomorrow to possibly be a catalyst for the Euro to surge higher again.

I said the Euro was ripe for a short and I was right. However I was looking for one more pop higher before getting into a trade. It shouldn't matter, the next Euro Daily Cycle should move back up towards $1.38 and that will be the best IC short trade level. Looking at entering into EUO within the next 2 weeks.

In the weekend report I said "Although there is still some small upside potential, it's probably time to close the positions." Well the Euro clearly topped since then and it's now on its way to a DCL. I believe this will be short lived and the Euro will be back on its way up to the $1.37-39 level where it will find its Investor Cycle Top. A little more downside to $1.335 and I would go long the Euro again.

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