I started to short Euro probably 2 years ago when it was close to $1.50. Along the way, Euro significantly plunged but bounced back strongly as well. I discussed Euro several times in my blogs, e.g. here and here. More recently I was even questioning why Euro was still relatively so strong above $1.40. For me, Euro is a doomed currency and eventually will die and disappear or significantly altered. I stick to my timeframe that I think Euro will not be existing anymore in the current form within 5 years.
But today I exited some of my Euro short positions, of course with good profits. Why? As much as I even more convincingly believe that Eurozone cannot resolve their problems with the current structure and form in place and Euro will for sure fail, in the near term, I'm afraid Euro may bounce back. I was almost like the only person to be bearish on Euro several months ago, but all the sudden it seems everyone is bearish now and Euro dropped below $1.30 yesterday. As I have said from time to time, when something becomes too much focused and everyone believes the same thing, it is the time to be cautious and probably need to take an opposite action. I think the US$ is becoming too strong too fast lately and is susceptible to reverting its trend. If this happens, Euro will appreciate against the US$. I will jump in again to short more Euro at that time as ultimately Euro is a dead money.
No comments:
Post a Comment