Forex Forum to Share, Discuss, Communicate and Trade Forex

Have the Bears Taken the Euro Low Enough?

Please share any observations which can lead to a surer or bigger market movement. Sometimes there are signs for a possible major move but we may miss to notice those. This sub-forum is for such signs. Please contribute to bring up the best.
Image

Have the Bears Taken the Euro Low Enough?

Postby cashbackforex » Thu May 24, 2012 8:54 am

When is the last time the markets have heard anything bullish about the euro? The perils of the single currency, the sovereign debt crises, the underfunded European banks, the lack of a lender of last resort, and repeated stories Greece is about to leave the euro, are all repeated and embellished by the bears.

We, too, have been have been euro bears for a lengthy period, but have we gotten to the point where the bulls have capitulated, and the bears have doubled down on their positions? Granted currency markets are usually trending markets. and often they last a long time. Despite the perils of picking a reversal, we think there are some reasons for the bears to be cautious.

The bear side of the market has become very popular. The latest COT Report showed in the futures and delta adjusted option positions, the speculative bears had increased their short position to 219,642 contracts, a recent record. Speculators also have an expanding short in the Swiss Franc. Since the SNB pegs the SF to the euro, the large short in the SF is really a proxy for a short euro. The open interest in the SF is much smaller than the euro, but the specs are short 93.7% of the OI in that market.

So far, the bears have the money, but with so many on one side of the market, what would happen if the sentiment shifted?

The European debt mess continues to evolve, and perhaps there is a lot more to the down side, but the trade is lined up very short.

A bullish surprise might jolt the market.

Image
CashBackForex.com
User avatar
cashbackforex
 
Posts: 21
Joined: Thu Apr 19, 2012 12:21 pm
Location: Cork, Ireland

Re: Have the Bears Taken the Euro Low Enough?

Postby Haley12 » Fri May 25, 2012 7:23 am

Greece financial crisis is increasing day by day and due to this EURO is going down. The good thing is that only Eur and USD is much affected by it, while there is not much affect on other currency pairs.
http://www.ask-fx.com
User avatar
Haley12
Senior Member
 
Posts: 658
Joined: Wed Sep 21, 2011 7:00 am

Re: Have the Bears Taken the Euro Low Enough?

Postby eur/usd trader » Fri May 25, 2012 1:17 pm

Haley12 wrote:Greece financial crisis is increasing day by day and due to this EURO is going down. The good thing is that only Eur and USD is much affected by it, while there is not much affect on other currency pairs.


I wish to disagree with that. Anything of such measures affect overall sentiments and whatever direct correlations may or may not be there but the no currency pair remains unaffected. See the heavy movements all over during the recent days.
eur/usd trader
 
Posts: 17
Joined: Wed Oct 19, 2011 3:41 am

Re: Have the Bears Taken the Euro Low Enough?

Postby Haley12 » Mon May 28, 2012 7:48 am

eur/usd trader wrote:I wish to disagree with that. Anything of such measures affect overall sentiments and whatever direct correlations may or may not be there but the no currency pair remains unaffected. See the heavy movements all over during the recent days.


I also disagree with you. There are many other reasons for "heavy movements all over during the recent days".
http://www.ask-fx.com
User avatar
Haley12
Senior Member
 
Posts: 658
Joined: Wed Sep 21, 2011 7:00 am


Return to Forex: Alerts - Observations - Watch outs

 

Who is online on Forum

Registered users: Baidu [Spider], Bing [Bot], Google [Bot], Yahoo [Bot]

cron