Don’t get me wrong – some of my best friends are European. But I may be a little economically prejudiced against them. Their labour markets are rigid, inefficient and too costly. Their social safety nets are in some cases absurdly extravagant. The growth outlook is poor, and they have no mechanism for adjusting for the differing performances of countries within the Union. That’s why I like sell signals on EUR/USD.
You can see why it’s on my watch list at the moment:
Triple top, anyone? Aggressive traders may sell right now, with a stop above the December high at 1.3893. However, I’ll wait for a drop below 1.3820, with a stop above 1.3850. The initial target is 1.3710, with a stretch target around 1.3550.