Take a look at the included weekly long term chart of the Euro.  The major uptrend line in blue was broken in the last two weeks.  This trend line had held up since March of this year.  So has the Euro topped out?  Or is the Euro just changing the angle of its long term ascent?

Another uptrend line, drawn in red, has been broken this week.  The next support level comes in near 1.4400 which is the level in September, that prices broke out and rushed to the recent highs.  So, that breakout point, near 1.4400 now becomes support.  The other bearish thing about this chart is the bottom directional movement indicators.  The red line hasn’t crossed the green line to point long term bearish yet but is getting closer.  The problem is the purple ADX line has now turned down from a lofty level following a several month up move.  On the daily charts we currently have a covered put write trade and a put ratio spread to attempt to take advantage of this potential down move.  For now, I expect that this is an intermediate correction that is large and may only last several weeks before resuming the long term uptrend, but I will have to see how this develops over time and let the chart tell us what is happening.

 David Hall

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