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The Euro Breakdown, When Will It End?

Friday, 4 Jun 2010 | 5:59 PM ET

Maybe it’s us, but it sure seems like moves in the euro are starting to foreshadow moves in S&P. So when will the selling stop?

Todd Gordon of Forex.com called our attention to the pattern on the Halftime Report saying that even when the stock market rallied on Thursday the euro performed poorly.

And low and behold – by Friday the Dow had plunged by triple digits.

Considering the euro broke below 1.22 on Friday, yet another important technical level, when will the selling subside?

According to the Fast Money desk, don’t expect the selling in the euro to end anytime soon.

In currency markets, the moves that we’re seen over the last few days typically take months, explains Guy Adami. 1.15 is the next technical level to watch but I think it's just a resting point on the way lower. At this point I don’t see anything that can buoy the euro against the US dollar.

I agree that the action in the euro is terrible, adds Brian Kelly. I don’t see any reason why the euro doesn’t go to parity (1 USD = 1 EUR).

We’re in a negative trend in the euro and I don’t see any reason for that to turn around either, adds Mike Khouw.

What’s the bottom line?

If the euro is in fact leading the S&P, it looks like a we’re going lower.


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Trader disclosure: On June 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Gordon Is Short Australian Dollar; Terranova Owns (RIG), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (IPSU), (SWN), (AAPL), (CVS), (IPI), (TEVA), (FXB), (GLD), (V); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman Owns (BAC) Leaps; Finerman Owns (BBY); Finerman Owns (BP) Calls; Finerman Owns (HPQ); Finerman Owns (JPM) And (JPM) Calls; Finerman Owns (RIG) Calls; Finerman’s Firm Owns (AAPL); Finerman’s Firm Owns (BAC); Finerman’s Firm Owns (BBY); Finerman’s Firm Owns (HPQ); Finerman’s Firm Owns (JPM); Finerman’s Firm Owns (RIG) Calls; Iuorio Owns (GLD), (VNR), (C ); Iuorio Owns (ABX) Calls; Iuorio Is Long Put Vol In S&P Futures; Iuorio Owns (FXA) Calls; Iuorio Owns (FXC) Calls

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