Euro Weakness

Euro Futures, Daily Chart

The Euro has tumbled since the 20-week moving average failed to act as support this past Monday. European exporters have to be pleased by the respite this currency weakness is beginning to provide.

The breakdown of the Euro has to make the dollar bears scratch their heads. Where's Stephen Roach with his inevitable "glass half empty" analysis when you need him? (I think he's on vacation, probably spending dollars.)

Recurring Roach: excesses of late-1990s bubble still unpurged; unprecedented current-account deficit; record-low net national savings rate and record household sector debt loads constrain consumer spending; lack of pricing power in corporate America leads to layoffs and outsourcing ("cost cutting"), hence no hiring, wage growth, or capital spending.

Euro Futures, 30-minute Chart

For short-term traders, the EC has been playable on the short side for a good long time now. In the chart above, you can see the pretty up bar at 9:30 yesterday that was perfect to execute against. Trade with the trend and keep your stop tight!

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