Update on the euro...still weak

Vox Day reiterates the socionomic cas for a breakup not only of the euro, but the EU as well. The breaking of the Euro

Mish Shedlock notes that focus has moved from Greece to Portugal and that the bailout rally in the euro is over.
Debt Worries Shift To Portugal; Greece Borrowing Rates Back Near Highs

Here's a look at CurrencyShares Euro (FXE).

The post-bailout rally caused FXE to break through its 50-day moving average, but it needs to hold it if the rally is going to continue. As the relative strength above shows, FXE's RSI was above 50 during the rally and below 50 during the decline. The recent rally barely pushed it over 50 and at 51 and change now, it could easily slip back. MACD is rising, but when the primary trend is bearish, the bullish divergences carry less weight.

I have nowhere near enough experience with Elliot Wave to make an accurate call with it, but it seems FXE could have finished wave 5 of a larger wave 1 decline, which would mean a wave 2 corrective wave may be underway. If so, it would be an A-B-C, and the current rally may extend into the $1.40s, eventually leading into the major wave 3 decline that takes the euro well below its 2009 lows of $1.25.

Also working against the euro is a possible rise in Asian currencies. Asian currencies remained weak to stay competitive with China, and China held the peg against the U.S. dollar for the first half of the 2000s. This meant that the euro was left bearing a lot of the brunt of U.S. dollar weakness. In general, rising Asian currencies should contribute to euro weakness.

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