So far it looks like 2010 is going to be labeled the year that the Euro crashed.
The Euro has taken beatings from all major world currencies over the past 6 months and it may not be over yet. The Euro is quickly approaching the 1.16 level against the USD that we talked about a few weeks ago. If sanity holds, we should see a bounce at the level and maybe a short term ranging. All eyes should remain on the 1.15 level, because if the Euro pushes steadily past that level, it’s a long way down.
There really isn’t much case to support buying the Euro just yet. As extreme as it sounds, we are potentially looking at the 0.85 level on the EUR/USD if the 1.15 area does not hold.
If you have been buying the EUR/USD, set your stops, because it could get ugly. This isn’t a good time to be guessing the turn around point, it is more likely that we will see an continuation of the trend.
Of course, this isn’t trading advice, just a pointer to the facts. Eurpoe is a mess at the moment, it has a long road to haul, and since no one in Europe seems too alarmed over the drop of the Euro, there is no reason to expect a change.
For now, Euro shorts continue to rule.