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The Euro Is Sitting at a Critical Level

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Wednesday's high held resistance, and must now resume its decline or else rally sharply.

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The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: The reactions from Sunday night's extremes persisted through Wednesday. Following through an extra session suggests that their levels should be considered predictive, and that ever breaking them would trigger a very durable reversal in the opposite direction.

Dollar Basket
Mar Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Wednesday's open blipped down before recovering into the afternoon, touching two-week-old highs. Piercing them with almost any upside follow-through Thursday should be able to extend higher throughout the day.

Eurodollar
Mar Contract EC; (NYSEARCA:FXE)
Initial firming Wednesday reacted down from touching 1.3580 resistance to keep alive the potential for resuming the decline.

Gold
Feb Contract GC; (NYSEARCA:GLD)
The drop underway from Sunday night through Tuesday morning didn't resume Wednesday morning, and ultimately avoided a lower close that would resume the decline. But a close back above 1246.00 and 1248.50 was also avoided, so the rally hasn't yet resumed.

Silver
Mar Contract SI; (NYSEARCA:SLV)
Narrow ranging Wednesday held above 19.70 to avoid gaining downside traction, but did not reject Tuesday's test to try resuming the rally.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Gapping down Wednesday left no unfinished business above at Sunday night's highs to prevent trending down. And a post-open bounce filled the gap at Tuesday's close to neutralize its attraction. Trending down without first retesting Sunday night's highs would not be optimal, but still credible if there is a second consecutive lower close Thursday.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Despite extending higher through Wednesday's open to test 96.90, the bounce pattern still offers no long-entry signal to participate. Closing back under 94.75 would start to signal momentum reversing down.

Natural Gas
Feb Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Just rallying into Tuesday's open above 4.34 after gapping down Sunday night to 4.20 already indicated the head-and-shoulders downleg wouldn't resume. It also created the vulnerability to extending higher, which Wednesday's open exploited by gapping up above the bounce's 4.48 highs at 4.60 and extending higher intraday to test 4.70. Now 4.77 and potentially 4.97 are in play.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.
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