The Shrinking Euro

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I wanted to provide an explanation as to why this blog space has not been updated for the past number of days. There was a death in the family and I needed to help tend to the matters associated with that.

The chart above is a daily March Euro Currency. The Euro has fallen precipitously from its high versus the U.S. Dollar since its November and December highs. Today’s action appears to have kicked off a new leg to the downside.

The news events surrounding this are continued questions over the debt of Greece plus other “Euro Nations” and also reaction to the daily economic news items of U.S. Housing Starts, PPI and earnings announcements from a number of the U.S. Banks. There was also the Massachusetts Senatorial election to digest. A Republican actually won in that state, filling that left open by the death of Senator Edward Kennedy some months ago.

Perhaps as important as any of the already mentioned news items was more out of China regarding the head of banking regulation requesting banks to stop lending money until the end of the month. This has created what is turning out to be a flight to safety or quality in the U.S. Dollar and hurting commodities of all sorts and currencies of other nations. Metals too are under a great deal of pressure with Gold down $30.00 per ounce and Silver down 90 cents per ounce.

Back to the chart above, I have included the Fibonacci extension targets which show the .618 extension at approximately 14008 and the .750 at approximately 13886. These may be reasonable price objectives to look for in the relatively near term picture.

If anyone would care to add anything or comment on what is looking to be an important day in the markets please do so. As we conclude this the Dow Jones Industrials, which hasn’t been mentioned, are roughly 160 points lower on the day.

Good trading to all

Jeff
CB&S