Incredible that the (cash) equity indices closed slightly positive on the session on Friday after a very ugly overnight session. Most glaring from my perspective was positive the action in gold and in the euro.

Although the euro/dollar must hurdle 1.3100 to trigger initial confirmation that a low (at 1.2770 on Friday) has been established after a relentless 5-week decline from the 12/18 high at 1.4715/20, today's near 2% climb off of the low imbues the chart structure with a look of downside completion ahead of a potential recovery rally period. ETF traders may want to watch the FXE.

Meanwhile, spot gold prices have ignored the entire 13% fall in the euro (climb in the dollar) since Dec 12 and instead are 2% higher than they were on that day! What now?

From a pattern perspective, if I get creative I can make the case that that all the action since last August represents a base-like pattern in gold and a lopsided, similar pattern in the euro (admittedly, a "deviant" right shoulder, though). On Friday gold surged out of its base, and perhaps the upside reversal in the euro signifies the start of a "catch-up" upleg to complete its lopsided base.

Upside follow-through in the euro will be very interesting indeed -- and might propel gold prices that much higher as well.