A Different Perspective on the Euro

First, it's quite interesting to see that the Euro has rebounded, but that yet, the speculative short positions from commercial traders has risen to yet another all time high (see chart below).

Peter Campbell over at M3 Financial Analytics has posted quite an interesting post about the Euro. According to his chart and his analysis, the Euro bottoms only after the short covering has started, and the current rebound might be a head fake.

As you know I am now long the Euro. So the consequence is that I will need to monitor tightly those positions as Peter might be right on his analysis — although I hope he's not ;-)


Tiho said...

LOL! So you believe anyone who writes any chart anywhere, including me? You should only believe in yourself and your common sense (hopefully have some).

First bit of common sense is that nothing ever bottoms on a single V trough majority of the time. So the Euro cold easily come back to $1.28 or whatever and create a retest of some type, you understand?

Second bit of common sense, is that previous historical COT data does not garantuee same outcomes in the future. Euro can bottom with out without short covering and despite what this newb says.

Third bit of common sense is that if majority are betting long the USD and keep adding more and more positions against it, while the Dollar is falling and Euro is rising, that is called disbelief and a wall of worry.

With everyone super bullish on the Dollar, why would you have to monitor it closely? If the Dollar rallies, just sell more Dollars. The herd is about to get a short squeeze of a life time!

pej said...

We'll see what happens. As you know, I'm long the Euro short the USD.

Keeping an open mind is nonetheless important.

Being overconfident is not a good thing.

I hope you're right on your short squeeze of a lifetime nonetheless. Let's see how it pans out.