This morning the Euro is catching
a sharp bid higher from a very oversold technical condition. The
European Central Bank announced that they will start buying bonds from
distressed nations. In other words the ECB will be following the Federal
Reserve Bank's quantitative easing approach. This news is the catalyst
for the large stock market bounce in Europe and the United States this
morning. Inflate the markets at all costs is the motto by the central
banks around the world. Today the Currencyshares Euro Trust(NYSE:FXE) is
trading higher by $1.24 to $130.54. There will be intra-day resistance
for the FXE around the $130.75 and $131.00 levels.
When the Euro currency is higher that only means one thing. The U.S.
Dollar Index must be lower. As the U.S.Dollar declines the rest of the
markets inflate higher. Just about every asset class is trading higher
this morning. Oil, copper, iron ore, steel, cotton, are just a few
commodities that are soaring higher today. The popular copper stock
Southern Copper Corp.(NYSE:SCCO) is trading higher by 1.10 to $43.06.
Should the U.S. Dollar Index catch a bid today the commodity complex
could pullback off the highs. Right now the inflation rally looks to be
pretty strong this morning. However, should the Euro begin to decline
this rally could be halted. Currencies such as the U.S. Dollar and the
Euro are dominating every move in the stock market.
Nicholas Santiago Chief Market Strategist InTheMoneyStocks.com
