Recently in January we hit the 52 week high, which stands at 136.03. The 52 week low is at 119.73 which we pinpoint in July of 2012 and therefore technically its more likely we will go lower from here. The political and economical pressure is not promising any good either as Europe finds itself in a sluggish recovery. The BOE, Fed and BOJ implementing measurements that will stimulate the economy through asset purchases that deliberately devalues their currency in order to prop up the GDP. So in order for other currencies to go down another has to appreciate in value, which in this case is the euro. An appreciating euro in combination with a sluggish to flat recovery will keep the ECB awake at night and at least doubtful whether additional measurements needs to be taken. Also with the FOMC minutes released yesterday signaling an earlier stop or at least a possible reducing standpoint in the additional easing gives reasons enough to see the U.S. dollar appreciating in the near-term, which would cause FXE to visit lower levels.
Sven Van Tongeren
Sven@KeeneOnTheMarket.com