One Sunday in the future we're going to get a real big surprise from the European side of the Atlantic. Whether its a Greek exit, one of the other PIIGS, or even the more exciting Germany 'we're leaving', its just a matter of when. Regardless, we're currently seeing a moderate pullback in the Euro.
With the break above 1.26 a few weeks ago, the Euro has broken the long standing upper descending channel, that goes all the way back to spring 2011, when the Euro was 1.47
We have a few obvious gaps to the downside in the coming days, 1.27 and 1.24. The latter seems unlikely to be hit in the very near term.
What seems clear is that the Euro is a much dirtier piece of paper compared to the Dollar, which is without question still King in fiat land.
Long term Euro trend still appears likely downward, one Sunday night though, it could all change literally overnight. If one of the PIIGS leaves, the Euro would probably be stronger. What is probably one of the ultimate black swans....a German exit. Right now that seems impossible whilst Merkel is in command, but she won't be there forever.
*across the weekend, the important monthly cycle update. Have a good weekend
Goodnight from London