EURO monthly update
The Euro broke out of a 2 year uptrend and recovered on those bailout and EFSF leverage bullshit news back to the uptrend support turning it into resistance. We also have the down trending line of the recent tops with both lines crossing around 1.43 which should cap any advances. We remain still oversold on weekly terms but have recovered as did the stock market to neutral levels which gives way for another downleg soon. By mid November the Euro will come under big distress indicated by astro patterns which are very strong and unpleasant and last through Q1 next year. Europe will be at the brink of breaking up and it even might happen since by end of Dec an additional pressure with a very negative spin will come from the USA by astro patterns. Very dangerous is a very rare pattern as the 50 and 200 MA’s for the Euro are running parallel which is an indication for a big trend to develop soon without any bias which way it will go. 2 possible scenarios as the EU could be reduced to core countries around Germany throwing out all the weak PIIGS which would be a strong Euro but I do not see the right people in power for such a bold move and therefor its less likely. The other is the EU just implodes and we get a very weak Euro. The only question is how fast USA will take back the spotlight for negative news as it is heading for an election year which will be very ugly and the economic short falls will be back with another very likely lock-down of the budget and a looming technical bankruptcy situation. For the next 4 weeks the Euro will trade in the 1.30 – 1.43 range and any strength should rather be sold as the situation will escalate beyond Greece as Italy is at the brink of disaster as well. Draghi will cut rates latest by Dec and be more aggressive about a QE situation for the ECB but Germany will slow him down and at the end of the day there is not a lot any central-bank can do.