This week the Euro dropped a massive 3.1 percent to close at $1.1204 on Friday at the New York cut. In fact this is the biggest biggest weekly loss on the Euro since September 2011. Altogether The Euro is right on course for a seventh month of decline against the US Dollar.
What is notable this week is the amount of new shorts coming into the market with hedge funds taking the lead and with large speculative short positions for a push for a further decline in the Euro against the US Dollar.These positions are far larger than anything ever seen since June 2012 and suggest that the trades are not short time swing trading initiatives but rather longer term strategic positioning for a push towards the US Dollar 1.00 parity.
Smaller time traders learning their trade may observe these large positions and determine entry points for short positions on any signs of a bounce. However positions must never be left open and call option hedges are necessary to protect smaller traders from larger unexpected volatility that could over-run a stop loss.
At then moment there is no fundamental cause for longs to hold their play and weaker longs are being taken out on 10 and 20 day support points day by day. But watch daily volume,COT and upside pricing in a days range for any indication that the relentless push south needs to take a little rest.
On Reuters today you may catch an interesting comment on the article
Political foundation of euro project has been weakened - ECB's Coeure
Which discusses the unraveling of the Euro,and another important article at Reuters today below which amply illustrates that Germany is at loggerheads with the ECB on the QE program.
ECB's Mersch: German reservations reflected in QE's "small print"
Given the fractious relationship between Germany and the ECB it is no wonder that traders sense a divisiveness that does not encourage any immediate postulations for Euro Zone economic strength. Hence hedge funds hovering in the skies like vultures sensing a further precipitous fall from grace.
The Guardian UK newspaper today comments "better late than never"
However, this commentary starkly admits indecisiveness at the ECB in the very first place and seems to stand right in the face of an old trading adage that "Good Money doesn't chase bad" and ignores the trading concept universally come to be acknowledged as - Gresham's Law - that bad money eventually chases out the good.
1.00 parity is in play.
Pieter Bergli - DeLoren Trust Holdings
Forex education - the currency markets education
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