The euro’s rally from the depths of Sunday night’s selloff is proof that the supposedly smart money is as clueless as the rest of us about what Greek’s capitulation might bring in its wake. Financially speaking, Europe is directly in harm’s way, and so yesterday’s rally might be likened to an even-odds bet before the All Star break that the Cubs are headed to the World Series. A plausible explanation is that the long-expected news caught those who had bought the rumor aggressively in a short squeeze. Regardless of its cause, however, the buying spree points higher over the near term, driven as it is by two uptrends of different degree that have yet to reach their respective targets. Both are shown in the chart, with the larger of the two projecting to 1.17, the smaller to 1.15. The latter has a corresponding midpoint resistance (p) at 1.125, and if it is exceeded on a closing basis Tuesday, or by more than a penny intraday, I’d infer that 1.170 is likely to be achieved as well. ______ UPDATE (11:18 p.m. EDT): An ‘inside day’ added no clarity to the picture, but the euro is likely to sink if there’s no follow-through by week’s end to Monday’s cattle-prod rally.
