As at 8.46am GMT, USD/EUR cross rate was trading at 0.825. This is above the high of 0.823 recorded on May 26. See Chart 1 below.


Chart 1: USD/EUR as at June 1, 2010_8.46am GMT (Source: Yahoo Finance)

From the chart below, we can see that EURO index found support at the horizontal line at 121. Without a rebound, we cannot call this a double bottom reversal. If the breakout in the USD/EUR cross rate is signaling further weakness for EURO, then we can expect the EURO index to break below the 121 horizontal support. At this moment (5.00am EDT), the major European stock markets (FTSE, CAC & DAX) are all down by 2%.


Chart 2: EURO index's daily chart as at May 28, 2010 (Source: Stockcharts)