“The latest rally looks to have morphed into a Euro Currency breakout that may have legs. If so, it would provide commodities some long awaited relief from King Dollar. Take Gold for example – it’s been on fire in 2016 and looks to be enjoying the tailwind of a stalling/weaker US Dollar. As well, Crude oil, copper, and select grains are off their lows. Perhaps a weaker buck would help them out too,” according to See It Market.
What could stand in the way of an extended rally for FXE is the European Central Bank possibly adding to its quantitative easing efforts. The ECB disappointed markets in December by announcing smaller-than-expected additions to its QE program, prompting speculation that the central bank could make a more dramatic announcement sometime this year.
“If this Euro currency breakout sees upside follow through that leads to a meaningful rally, it would add pressure to the US Dollar and help US corporations with exports and overseas sales. But that part of the equation may take a some time to bear fruit,” adds See It Market.
CurrencyShares Euro Currency Trust
