No Big Deal: Just a Nine-Year Bear Market Bottom, Part II.

To update this blog post from May 17th, the Euro certainly appears game to take advantage of the weakening U.S. Dollar this summer (gold and her miners would be wise to do the same, indeed). 

On the FXE (Euro ETF versus a basket of currencies) monthly chart, below, note how Euro bulls have done a valiant job of defending against a new leg down after weakness late-last year threatened to negate the support from 2015 and most of 2016. 

So with Euro bulls pulling off a stunning, multi-month rally, the case for a major Euro bottom remains in place and is actually strengthening. At a minimum, a test of the upper monthly resistance trend line around $120 makes sense as an initial target. 

But as markets are known to do, just when it became widely-believed the European Union was imminently finished, the currency rallied just when things looked darkest. To be sure, there remain considerable issues in the EU from a long-term perspective. However, even the most steadfast Euro bear would have to concede that the currency sure did price in a lot of the bad news over the course of many, many years.

Thus, a multi-quarter or even multi-year cyclical relief rally ought not to be cavalierly dismissed. 

Again, the missing link from the Dollar weakness of late has been the lack of urgency by gold bugs to pounce for a sharp rally in miners. But Euro bulls sure are setting a good example.