With market correlations at record highs and stocks charging or dropping violently on the latest European headline, it makes sense for investors to play very close attention to exchange traded funds that follow the euro/dollar cross.

The euro spiked against the dollar Wednesday morning before reversing hard. CurrencyShares Euro Trust (NYSEArca: FXE) was down fractionally in early U.S. trading.

The European Central Bank made three-year funding available to banks, and lenders reportedly snapped up the loans. [ETF Espresso: Advisors Turn More Bullish on Stocks]

The euro ETF is trading below its 50-day and 200-day moving averages. Further weakness would be a bad signal for stock ETFs because U.S. equities have shown a high correlation with the euro. Of course, correlations are always changing, but for now U.S. stocks seem to be taking their cues from Europe’s common currency. [Euro Under 1.30]

The euro ETF is sitting slightly above its 52-week low.