Best Financial Markets Analysis Article Incredible that the (cash) equity indices closed slightly positive on the session on Friday after a very ugly overnight session. Most glaring from my perspective was positive the action in gold and in the euro.

Although the euro/dollar must hurdle 1.3100 to trigger initial confirmation that a low (at 1.2770 on Friday) has been established after a relentless 5-week decline from the 12/18 high at 1.4715/20, today's near 2% climb off of the low imbues the chart structure with a look of downside completion ahead of a potential recovery rally period. ETF traders may want to watch the FXE.

Meanwhile, spot gold prices have ignored the entire 13% fall in the euro (climb in the dollar) since Dec 12 and instead are 2% higher than they were on that day! What now?

From a pattern perspective, if I get creative I can make the case that that all the action since last August represents a base-like pattern in gold and a lopsided, similar pattern in the euro (admittedly, a "deviant" right shoulder, though). On Friday gold surged out of its base, and perhaps the upside reversal in the euro signifies the start of a "catch-up" upleg to complete its lopsided base.

Upside follow-through in the euro will be very interesting indeed -- and might propel gold prices that much higher as well.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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