The euro has been plummeting over the past few weeks, as capital continues to aggressively move out and as central banks break (Switzerland) or on the verge of breaking (Denmark) their pegs to the Euro. However, it seems like we are getting a bit of a rally in price. Below is a weekly chart of EUR/USD. The past 6 trading sessions have been fairly bullish in all -- the first signs of sustained bullishness we've seen since March of 2014.
If this is a counter-trend rally after an overextended downtrend, we might see EUR/USD rally to resistance at 1.920. To put it in perspective, it would take a pullback to 1.25 to get to the 50% Fibonacci retracement level of the move down since May of 2014. If short covering emerges en masse, could we get there?
What do you think?