Euro is Going to Bounce Soon, Despite What Everybody is Saying.

By – Casey Stubbs

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We have started the year of with nothing but consistent drops for the Euro verses all major currencies. The current market sentiment is nothing but negative news.  The constant stream of bad news is going to continue to drive prices lower on the Euro.  Equally important is the string of positive news coming out recently on the Dollar.

There was recent negative biased opinion on the Euro put out by Chief economist Olivier Blanchard.  He believes the Euro will be continue to be in a recession.  So based on that opinion we can expect to see more downside in the Euro in the near term.

Get a detailed report on the Eur/Usd from Forex Abode.


However I personally see a strong potential reversal based on the following things:

  • The Federal Reserve still wants to devalue the Dollar and is looking to proceed with QE3 the consequences of that will be a large devaluation of the Dollar.
  • With all the shorts in play right now it is only a matter of time for a massive short squeeze to come into play.
  • Goldmans’ talking Head makes a bearish Euro statement which usually leads to a reversal as reported by Zero Hedge.
  • Commitment of Traders Report for the Eur/Usd hits a record for the most shorts held at one time. If everyone is short than there will be less additional selling pressure.

So in the time being I would play this market by shorting all large pull backs in high resistance areas. But do so with caution and great risk management because as I mentioned a short squeeze could come into play.

Lets take a look at the Chart:


Eur/Usd Daily

Click on Chart to Enlarge

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Additional Article on the Dollar Index.



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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.

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