The Euro may have formed a “Bearish Head & Shoulders” pattern over the past 9-months with the neckline having a hard time holding as support at (1) in the chart above.  At the same time the US$ is working on breaking a resistance line that has held the US$ in check for the past 8-years.

If the Power of the Pattern read is correct in the Euro and the neckline fails to hold as support, the Euro could quickly fall 5% in value, to the next support level around $1.20. 

In the past a Euro decline/US$ rally was bad sign for stocks, this chart reflects that over the past two years, a higher US$ has meant higher stock prices!

How the Euro handles the neckline is super important to the future of risk assets!


How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past