Today I would like to draw your attention to two stunningly similar charts. – The top one is the Bund Continuation Future (German 10 Year Government Bond) from 2006/07, the second one is the EURSEK FX cross over the past 18 months. – As you can see the similarity is striking. – I have been incredibly bearish EUR/SEK in recent weeks, however it has hit some key Fibonacci projection targets, which were always like to cause a pause in the downtrend.
However, I would suggest watching out over the next few weeks to see if this pause unfolds. There are, of course, no guarantees that this will correct in a similar way to the Bund correction higher of the second half of 2007, which completely retraced the Q2 2007 drop, but I think this is worth noting.
By the way for those of you with a curiosity for Technical Analysis, the pattern in both cases is a rare inverted "Cup And Handle" Pattern. Whenever I mention this pattern to people it is usually met with howls of laughter and accusation that I made it up. Well it does exist and is not made-up, here is a link to a detailed description of this pattern. 
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Food For Thought On The Great Euro Sell-Off
Published 08/22/2012, 03:53 AM
Updated 07/09/2023, 06:31 AM
Food For Thought On The Great Euro Sell-Off
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