Euro Poised to Take Off

Purely from a technical perspective, the euro is poised to take off against the dollar.  All week long, the euro has consolidated in a tight range roughly between 1.4290 and 1.4100, which resembles a Bull Flag formation readying itself for an upside thrust.  If such a thrust unfolds, then we should expect EUR/USD to climb to 1.4400-1.4500 next.  At this juncture, only a decline that breaks and sustains under 1.4000 will begin to compromise the current bullish set-up.  Barring a break of 1.4000, gold and silver prices – the SPDR Gold Shares (NYSE: GLD) and iShares Silver Trust (NYSE: SLV) -- should react positively to an upside thrust in the euro, as should the CurrencyShares Euro Trust (NYSE: FXE).

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