In a couple of recent posts, I pointed out that I was hoping to see the Euro bounce off its long-term rising support line. That appears to be what is happening right now. In terms of gold and gold stocks, I would view this as a positive development, since a rising Euro will put pressure on the US Dollar.
In the above weekly chart of the Euro, notice that the currency broke support intra-week, but held it by the close on Friday. So far, I feel that this is a positive sign. Let's have a look at a daily chart of the Euro:
In this chart, the daily Euro price action is on top, and the red chart at the bottom is GDX, which represents gold stocks. Interestingly, every time the Euro has dipped into oversold territory, and then has left oversold territory, it has marked a buy signal for gold stocks.
Furthermore, if you look at the area I have circled, you will see what is know in the West as an island reversal pattern, or in Candlestick charting, a morning star formation. This is relatively rare pattern, and I think adds another piece of evidence to a Euro bottom.