Euro technical analysis
The euro is at a fresh low of the day, down 135 pips to 1.1391.
The charts this week -- across the board really -- have been a technicians dream.
I like head-and-shoulders patterns and this one lines up nicely with a return to the area around 1.05.
The temptation is to brush aside some of the worries about Europe because it's not nearly as bad as it was a few years ago but that doesn't recognize that the US economy appears to be accelerating and two more Fed hikes this year are more likely.
There's also the growing risks around trade and some of the NAFTA discussions sound like Trump wants to go to battle with European car makers and that can easily spiral. There's also risk aversion from a US-China trade war. At times that can benefit the euro but I believe that if it turns into a broad stock market story, then the dollar will win out on risk aversion.
All told, it's tough to argue with these technicals.
