ETF Trends
ETF Trends

An exchange traded fund that follows the euro’s movements against the U.S. dollar was fractionally lower Monday after the currency hit seven-month lows versus the greenback.

The euro “was seen still vulnerable over the next few weeks on persistent fears of a Greek default and the risk of contagion in the region’s banking system and larger economies,” Reuters reported Monday.

CurrencyShares Euro Trust (NYSEArca: FXE) was fractionally lower. The euro ETF’s steep decline recently has pushed it below its 200-day moving average and the support trend line from the 2010 low.

“FXE deterioration on Friday terminated the uptrend which started at the June 2010 low. The channel off the low was broken and a top was also confirmed,” said Tarquin Coe, Investors Intelligence technical analyst, in a newsletter Monday. “The longer-term chart has also taken a turn for the worse. The breakdown has occurred from three year trend line line resistance. The two prior down legs which began from this line persisted for months.”

The currency fund was up 2.4% year to date as of Sept. 9, according to Morningstar, but down 5.8% for the trailing three months.

“Providing the recent breakdowns hold over the next week or so, then euro currency weakness should continue into the year end,” Coe said. “That does not bode well for the ‘risk-on’ trade.”

CurrencyShares Euro Trust

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.