With Friday’s upthrust, the futures vaulted a formidable external peak at 1.2759, raising some vexatious questions about the euro’s fate. Although the weight of technical evidence has grown considerably more bullish with last week’s rally, it beggars belief to think that the euro is about to supplant the U.S. dollar, for more than a short while, as an ostensible safe haven for cash. At best, with the recent open commitment by the ECB to buy sovereign debt in whatever quantities are necessary to hold rates down, the euro should be merely hold its own against the dollar. That’s why I expect the former to go sideways once this short-squeeze subsides in perhaps a week or two. Until then, we have a 1.2885 rally target that we can use, or perhaps 1.2898 if any higher. Basis the December contract, those targets lie, respectively, at either 1.2888 or 1.2902.
