The Euro is facing an important price test that could highly influence the next big move in the metals markets.
From a very long-term perspective, the Euro remains inside falling channel (1), where it has created a series of lower highs and lower lows for nearly 20-years. Over the past 18-months the Euro could be creating a “Head & Shoulders” topping pattern at (2). Humbly, I can NOT say with total confidence that this is a topping pattern.
I am confident that if support breaks at (3), selling pressure in the Euro should ramp up and drive it a good deal lower. If the Euro does break support at (3), the next key support zone for the Euro comes into play around 1.04, which is nearly 9% below current prices.
If this support lower level would come into play, odds are decent that metals will head lower as well.
The bottom line for the Euro at this time, it is facing a very important support test at (3)!
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