Well, a shaky January comes to a close. The discussion of deflation and commodities is front and centre.
Check out this Euro and GLD chart. Look at how closely they correlate in January.
You can see the correlation down below is very strong. So why is this a "Don't Ignore This Chart" post today?
Let's look at the Euro trend line.
First of all, the Euro broke below the dotted line in Red today. The $USD will not update till end of day.
If you look at the two channels in red and blue, we can see they confirm each other. The $USD is at a serious resistance line on the chart.
February could be an extreme month for commodity volatility and the shiny metal will be included if this Euro chart continues the breakdown. All eyes on the Euro.
Good trading,
Greg Schnell, CMT
