Merrill's Mary Ann Bartels looks at a slew of technicals today, and focuses on the most relevant one for the day: the EURUSD, although she focuses on the dollar basket DXY. According to her Fibonacci analysis, the EURUSD has a 50% retracement target of 81.49, which "would correlate to a move in the euro to 1.3124." As the EURUSD is trading inside of 1.31 now, this means that purely based on the EUR contribution to the DXY, there is a short-term arb opportunity of going long the DXY which is at 80.90 and selling the EURUSD. Then again, with a firesale in everything EUR related a short leg may not even be required, especially with complete lack of liquidity in the market, and a total lack of appreciation that the US will have to print far more before all this is over.
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