Going Higher

I don’t know if this is just a bounce or a new leg to the rally. But we’re going up, folks.

The EURUSD is back near 1.275, after bleeding below 1.27 earlier. The collapse of the euro has been the driving force of the move in oil and the correction in the markets. That’s it; the big mystery. The oil glut, the game of “guess demand whack-o-mole”, the sudden fear – nothing next to the euro.

The other excuses being provided are just not that relevant. The data is fine. Demand is shifting around and notoriously sluggish but altogether fine also. Jobs creation is slow, but fine. There’s no real data even reflecting the fears of observers on display yet.

But the euro is an undertow and its move from above 1.4 to below 1.27 did damage. It strengthened the dollar considerably and sent trade out of balance.

With the euro firming up a bit, it’s going to help take some of the edge off. For as long as the EURUSD is lifting I am constructive on stocks and commodities.