Predictions for Euro-Bullish or Bearish?
Predictions for the Euro- Bullish or Bearish?
Trending Content
Career Resources
WSO Free Modeling Series - Now Open Through
April 30, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
Bearish. Long-term parity has Euro fair value at 1.16 - 1.21. It has traded above fair value for a long time, so I think something as low as 1.12 is justified. I am by no means predicting parity, but these are unprecedented times.
I would not go short from 1.24 for a number of technical reasons, but also because it's stupid to fight central banks. I see a bounce back to 1.30 - 1.35, and that's where I'd start building a short position. I'd space things out considerably and put a backstop around 1.50.
Risk to the trade is (i) ECB and by extension, the Fed and the UK amply manipulate the market, (ii) Deflation inflates currency value, and (iii) Worldwide flight to quality prefers the bund. (ii) and (iii) are arguably the same point.
There are better ways to express a bearish view on the euro - consider selling bund futures v. zn.
The Euro is in for a surprise this week... EUR/USD to 1.19 levels by end of the week....
More news and updates at http://financialnormal.wordpress.com
The worst is yet to come for the Euro and I do not see it bouncing back anytime soon.
Down, probably levels out around 1.18
Down to 1.15-1.19. I think something to remember is that last two times the Euro was at these numbers it went for a 6 month rally. However, keep in mind that this is a totally different situation. It has the potential to turn bullish in the next 2-6 months though I'm not holding my breath. It is certainly an interesting situtaion, and I have to agree with Yesman's strategy.
Definitely bearish
EUR/USD is nearing the key support level of 1.2135...a break below that support would point to 1.1640 into June
Euro is getting dumped.....simple as that. I like to say that in order for a currency to be strong it has to have one of three things-------commodities, strong banking, or manufacuring. EZ doesnt have commodites, They lost their manufacturing market share to china, their banking sector is on the brink. All the large french and german banks are holding billions of this bad PIIGS debt. When euro rode on the back of risk in 09, it had no business whatsoever being @ 1.50. It was pumped up for banks and central banks to get better price to sell it. For example, look where A/U is trading(.84), thats where euro may end up,and thats where it should be, who knows even lower maybe........Right now going into summer, (im currently short from 1.2650), Im looking for 1.1650 before the end of july.
Pariatur qui unde omnis culpa. Velit facere rerum et quis autem corrupti et. Asperiores ad officia aspernatur iusto quas corrupti et. Et minima ipsa natus aperiam omnis.
Molestiae accusantium qui perspiciatis velit natus qui. Earum iure veritatis deserunt modi asperiores omnis. Necessitatibus tempora necessitatibus voluptatem voluptas culpa. Delectus et veritatis placeat.
Corporis natus aut laudantium fugiat officiis harum rerum. Minus natus quam delectus recusandae modi a. Est quis libero officia. Ut numquam itaque blanditiis qui. Et adipisci dolorum sint.
Dolor eum qui reprehenderit esse maiores. Hic neque modi inventore qui veritatis omnis doloremque. Quae suscipit ipsam architecto ipsum aut dolorem voluptatem. Quas ut accusamus est hic quos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...