Weakness in global equity markets is helping to put pressureon the Euro and the commodity-linked currencies. Weakness in global equity markets is helping to put pressureon the Euro and the commodity-linked currencies. Risk sentiment seems to haveshifted overnight with investors becoming more risk averse. Profit-taking andposition squaring ahead of the start of the U.S. earnings season appears to bethe catalyst behind this morning’s early weakness.
The Euro is trading inside of major retracement zone at1.2609 to 1.2782. The current chart pattern suggests a developing daily closingprice reversal top. This could lead to the start of a 2 to 3 day break. At thistime 1.2609 is holding as support. A failure to hold this level could triggerthe start of an acceleration to the downside.