This morning the Euro is catching a sharp bid higher from a very oversold technical condition. The European Central Bank announced that they will start buying bonds from distressed nations. In other words the ECB will be following the Federal Reserve Bank’s quantitative easing approach. This news is the catalyst for the large stock market bounce in Europe and the United States this morning. Inflate the markets at all costs is the motto by the central banks around the world. Today the Currencyshares Euro Trust(NYSE:FXE) is trading higher by $1.24 to $130.54. There will be intra-day resistance for the FXE around the $130.75 and $131.00 levels.
When the Euro currency is higher that only means one thing. The U.S. Dollar Index must be lower. As the U.S.Dollar declines the rest of the markets inflate higher. Just about every asset class is trading higher this morning. Oil, copper, iron ore, steel, cotton, are just a few commodities that are soaring higher today. The popular copper stock Southern Copper Corp.(NYSE:SCCO) is trading higher by 1.10 to $43.06.
Should the U.S. Dollar Index catch a bid today the commodity complex could pullback off the highs. Right now the inflation rally looks to be pretty strong this morning. However, should the Euro begin to decline this rally could be halted. Currencies such as the U.S. Dollar and the Euro are dominating every move in the stock market.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
