Black Swan Capital - Currency Market Advisors

If you read us consistently, you know our views on the euro and where it’s headed.

And if you don’t know, you can sign up for our long-term currency investment newsletter and receive our latest FREE report:

Key Reasons Why the Euro is Heading to Par or Beyond against the US Dollar.

We just finalized it yesterday, and it’s a quick read, packed with the latest details and graphs on what’s tearing apart the Eurozone countries and will ultimately be tugging hard on the euro’s ankles for many months to come. (See David’s note at the end for more details ...)

What I ask today is: will the euro’s weakness, if it plays out according to plan, incite a run against the commodity dollars that’ve outperformed the euro and European currency by a long-shot (at least over the last two or three months)?

EURUSD Daily

[see below]

A close at current levels would be the lowest since last May. This very much looks like the euro’s brief correction has come to an end; a break of this support would confirm another streak lower before this move needs a real breather.

The commodity dollars, though, gained back far more ground in the last two months. Not only do they have a good ways lower before they encounter similar support levels, but they’re not nearly as far off their high marks. The Canadian dollar actually made a new high just this month!

[see below]

What’s the difference maker?

Besides the isolated problems in the Eurozone, risk appetite for US stocks has been unyielding. The S&P 500 turned back higher at the beginning of February and has barely stopped to look back, shooting to new highs and reaching levels not seen since September/October 2008.

While it is holding up, crude oil has not made nearly the same strides as the S&P; ditto for gold and copper.

The outperformance of the comdols seems to hinge on an environment where stocks just won’t roll over. But if these comdols don’t soon test their highs, they could be primed to roll over with any scare in the stock market, short- or medium-term.

John Ross Crooks III
www.blackswantrading.com