The enclosed weekly chart that the decline in the euro (versus the dollar) is pointed straight down and could be heading for a test of the major up trendline off of the October 2000 low at 0.8230, which cuts across the price axis at 1.29.50 this week. Nothing goes straight down (unless there is a panic situation), so I suspect that if uncertainties about members of the EUR (PIIGS) continue to gradually intensify, EUR/UDS should unevenly declined towards 1.3000. However, if there is a shocking event with the EUR, then EUR/USD could plunge in a straight line right to and through 1.3000, with implications, of course, for holders of the PowerShares DB US Dollar ETF (UUP).



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.