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Technical Signals On Euro Spell Trouble: Strategist

Wednesday, 7 Sep 2011 | 2:59 PM ET
John Block | Botanica | Getty Images

It's not enough that the German court gave mixed signals to the euro. Now the technical patterns aren't looking so good either.

When it comes to reading currency charts, it's best to do so with an eye to fundamentals as well. Todd Gordon, co-head of research and trading at Aspen Trading Group, is doing that, and he doesn't like the look of the euro.

"I think support was broken in the euro two days ago," he says, and while the currency rallied after Germany's top court rejected efforts to halt the Greek bailout, the rise was short lived. "The fact that we're below technical support and that rally overnight did not hold says there's an underlying weakness in the tape," Gordon told CNBC's Melissa Lee.

Money In Motion: Trading the Euro
Todd Gordon, Aspen Trading Group, co-head of research and trading, shares insight into trading the Euro post the Germany bailout. He suggests to sell the euro vs. the U.S. dollar.

True, the move by the Swiss National Bank to cap Swiss franc levels also lifted the single currency - but Gordon points out that the euro quickly gave back ground after that event as well.

Gordon recommends selling the euro at $1.40 or $1.4050 with a stop at $1.42 and a target of $1.36.

You can watch the whole discussion in the video clip.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.

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