The Charts You Need to See Today

First up is the Euro which has the makings of a triangle pattern. These patterns can break to either the upside or the downside… although it’s hard to find reasons the Euro might rally if Greece accepts the next round of austerity measures since most of its resilience has been based on hype and hope of this already.

Indeed, we also see the makings of a Head and Shoulders pattern on the 60-minute chart for the Euro (I’ve also kept the triangle lines in place).

A very common bearish pattern, the H&S here forecasts a downward target of 135-136 or so. Of course neither the triangle nor H&S has been broken yet, so it’s too early to make a move here.

If the Euro does fall, expect the US Dollar to rally based on its index weighting to the former currency. Indeed, we see the potential for a serious US Dollar rally in the form of a bullish falling wedge pattern that may just have broken out to the upside:

The target for this pattern would be north of 80… possibly even 84-86. However, the only thing that could trigger that kind of a run in the greenback would be a MAJOR Euro Crisis.

Since 2007, all major rallies in the US Dollar have been the result of stuff hitting the proverbial fan (the US has most certainly not implemented any fiscal moves that would strengthen our currency from a fundamental standpoint).

So, if and this is a BIG IF the US Dollar starts another bull run courtesy of a Euro collapse, we’ll likely see it peak out in the 84-86 range.

Should this happen, both stocks and commodities would take a sizable hit. However, of the lot Gold would come back the quickest. During the 2008 Crisis, Gold bottomed out in November 2008, a full four months before the US Dollar peaked. And the Euro Crisis of 2010 barely even dented Gold’s upward momentum:

To conclude,  the charts today appear to be emphasizing the threat of deflation courtesy of a Euro collapse rather than inflation. And while it’s too early to invest based on these patterns (most of the patterns have yet to break-out), we’re getting close to finding the most prevalent trends for the coming months. We’ll have a much better idea once we see the results of Greece’s austerity vote.

Good Investing!

Graham Summers

Disclaimer: The information contained on this website is for marketing purposes only. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice by Phoenix Capital Research or any of its affiliates, nor is it to be relied upon in making any investment or other decision. Neither the information nor any opinion expressed on this website constitutes and offer to buy or sell any security or instrument or participate in any particular trading strategy. The information in the newsletter is not a complete description of the securities, markets or developments discussed. Information and opinions regarding individual securities do not mean that a security is recommended or suitable for a particular investor. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. 

Opinions and estimates expressed on this website constitute Phoenix Capital Research's judgment as of the date appearing on the opinion or estimate and are subject to change without notice. This information may not reflect events occurring after the date or time of publication. Phoenix Capital Research is not obligated to continue to offer information or opinions regarding any security, instrument or service. 

Information has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. Phoenix Capital Research and its officers, directors, employees, agents and/or affiliates may have executed, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on this email. 

Past performance is not necessarily a guide to future performance and is no guarantee of future results. Securities products are not FDIC insured, are not guaranteed by any bank and involve investment risk, including possible loss of entire value. Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. 

Phoenix Capital Research is not responsible for the content of other websites or emails to which this one may be linked and reserves the right to remove such links. OmniSans Publishing LLC and the Phoenix Capital Research Logo are registered trademarks of Phoenix Capital Research. Phoenix Capital Management, Inc.
What Happens When the Everything Bubble Bursts?
  • By trying to corner the bond market (risk-free rate)
  • the Fed has created a bubble in everything
  • We call this THE EVERYTHING BUBBLE
  • Reserve your copy of our Executive Summary
  • To prepare for what's coming down the pike!
Your contact information will never be rented or sold to anyone EVER.