This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

7 Observations About the Euro

4. In addition, there are a number of political events that pose risks to the euro over the next several weeks.

Greece and France hold national elections. In Greece, it is not clear that the current coalition of the Panhellenic Socialist Movement and New Democracy is going to secure a majority, warning of possible concessions to less pro-European smaller parties.

In France, although the first round appears to have tightened, Francois Hollande still enjoys a large lead in the all-important second round.

Italy will hold municipal elections next month, and they will be seen as a referendum on technocrat Prime Minister Mario Monti, whose public support has waned since his push to weaken the infamous Article 18, which ossified the Italian labor market.

Germany holds two state elections, which should not be much of a market factor. Further erosion of support for the Free Democratic Party increases the likelihood that next year's national contest produces another Grand Coalition between the Christian Democratic Union/Christian Social Union and the Social Democratic Party.

Although Irish referendums have had market impact, this time that is likely to be different. The polls show that a comfortable majority favors approving the fiscal compact.

In addition, unlike other referendums, the fiscal compact is to be decided by a qualified majority, which means the unlikely veto would not derail the compact but simply cut Ireland off from further aid, should it be necessary.

Lastly, we note that the Dutch government nearly collapsed last week, and while it survived, it has yet to resolve the underlying budget problem.

5. The technical support for the euro has weakened considerably. The breakdown has followed the repeatedly unsuccessful attempts to push through $1.34.

The measuring objective of what may be a double top is near $1.3100, but the bottom end of the euro's trading range is closer to $1.2975-$1.3000.

The five-day moving average is poised to fall below the 20-day moving average, indicating that short-term trend followers and momentum players are likely to be more inclined to sell rather than buy the euro.

Although this signal has whipsawed participants in recent weeks, it does have a good record of catching big moves.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs