CurrencyShares Euro Trust (NYSEArca: FXE) is up about 4% the past month on speculation the European Central Bank will step in if the Eurozone crisis worsens.

The euro’s bounce is also providing fuel to the rally in U.S. stocks.

“CurrencyShares Euro Trust is developing a rising trend channel, the longest in duration since the January/February attempt. This is resulting in the relative chart versus the S&P 500 turning up with it now challenging three months of underperformance,” said Investors Intelligence analyst Tarquin Coe. [Chart of the Day: Euro]

“Should the price channel extend higher, in particular breaking above $127 [a share], then it would be very encouraging for the market in general. Worries over this currency have been a headwind to U.S. equities for the past twelve months,” the technical analyst said in a note Monday. “We remain bullish.”

The euro ETF is trading above the 50-day moving average but remains below the 200-day average.

CurrencyShares Euro Trust

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.