Euro ETF at Crossroads

The euro-trascking CurrencyShares Euro Trust (FXE) tested its 2010 low last month and the subsequent bounce has taken the exchange-traded fund back above its 50-day moving average. While this was a successful test of significant long-term support, the FXE is nearing what may be an even more important test of long-term resistance.

CurrencyShares Euro Trust (FXE) -- Weekly Source: StockCharts.com View Chart » View in New Window »

The weekly chart shows a downtrending resistance line drawn off the highs going back to last October. It has marked a one-year decline, during which the stock price has revisited several horizontal support and resistance levels, which had roles in the move higher off the 2010 low. That move higher was confined mostly to the upper Bollinger band channel, but after an abrupt shift occurred this time last year, the tighter range decline has been in the lower band range, below the 20-period moving average. The resistance supplied by that moving average is also being tested currently. Adding to the confluence of resistance is a potential inverse head-and-shoulders neckline....143 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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