Euro Flirting with Near-Term Downtrend

After consolidating in the Asian session and European morning, the euro has been bid higher in North America.  It is testing a downtrend line, drawn off the year’s high set in early August near $1.1910, as depicted in this Great Graphic, composed on Bloomberg. 

It is met the 50% retracement objective near $1.1785 today.  The 50% retracement is pegged at $1.1815.  

There does not appear to be a new fundamental driver of the move.  We suspect that North American participants are more dollar-negative than many foreign investors presently.  Near the end of the European morning, the dollar was higher against nearly all the major and emerging market currencies.  Now it is down across the board, including most of the emerging market currencies. 

Many economists seem to think that Cohn is the most likely to succeed Yellen at the helm of the Fed.  This is not the unalloyed good that some may have thought at the end of last week.  If Cohn does move over to the Fed, it may leave a disturbing vacuum in the White House.  Treasury Secretary Mnuchin is not seen having the saving market gravitas. 

The Dollar Index is just above it uptrend line, also drawn off the August 2 extreme.  It is seen near 93.15 today, which is also the 61.8% retracement of its bounce from earlier this month. 


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