Happy “Thin” Tuesday !

Yes…our “thin” Volume continues all across the Markets…and with plenty of illiquid Price action thrown in there as well !

This becomes an oxymoron, if you will…as high and low liquidity can equal low and high volatility and vice versa!

In this case…we do have recent geopolitical events in the Middle East which helped these two cases…but thats’ another topic!

Let’s jump right in and have a look at our Gold and Euro Dollar Hourly views from yesterday and see where we are….

Immediately, we notice our “general” correlation here has certainly “unwound and decoupled”!

My thought yesterday on a fundamental difference with these two has been validated.

We do, indeed, have Gold continuing its’ appreciation…and holding its’ Value…

And…

We do, indeed, have the Euro also continuing its’ appreciation…and skiing straight down the slope !

 As of this writing…about 2:10 GMT…here are the Charts.

(click once for captures)

Now…some macro-Fundamental points that we must consider in why our Euro/Gold “cousins” are not hanging out together on the Winter Ski slopes lately!…  

First of all, the EuroZone is truly feeling what all of us have been feeling around the world: a state of risk aversion and fear with probable Interest Rate declines in the months to come.

Despite the generally “hawkishly firm” stance of the ECB and it’s continued focus on Inflation…the world is surely proving this “sentiment” to be ill-advised.

Of course, more verification comes from the weak German and overall EZ Data Points lately and while we still may appreciate…the Euro Bull is beginning to tire.

The Chart of the Euro above illustrates this and also signals weak momentum and sentiment with such a robust reversal in Price behavior.

A significant breach of the “Basing” area there will take us to the 1.3820 Support level.

…And what of my old “girlfriend”, Gold?

We should find Her potentially revisiting the major Resistance at $890 and if this is not breached…a potential retracement to the $865 38.2% Fib/dynamic area is highly probable.

Tomorrow…I would like to revisit one of my Posts from last week on the Euro Pound and see how we are faring with the “Battle of the Channel” !