Euro may likely bounce from here

For those who have followed my blogs, you must know how negative I’m regarding the prospect of Euro. As I said repeatedly, Euro will collapse within 5 years. The current way that sets up Euro is to guarantee that Euro will not survive long. However, I don’t see the point that any major currency will collapse overnight. It will take time and back and forth for quite some time before it finally runs its course. Same for Euro. In the past half a year or so, Euro has been in a free fall and it has got to the point of extreme that almost everyone thinks Euro will simply continue to go down. The major banks like JP Morgan etc has a huge short position for Euro. Yes, it looks very ominous for Euro. But the thing is if everyone stands on one side of a boat, it will capsize. I think we are currently at this moment and yesterday we got  the first concrete sign that Euro may have reached a short-term bottom. How so? Well,  Greece got a new election done over the weekend and they elected a left wing leader, Alexis Tsipras, for the government. It is very well known that this party promised to fight against the International pressure and wanted to renegotiate the country’s bailout package and also threatened to leave the European Monetary Union. Needless to say, this is very bad news for Euro and should have dampen Euro further. Yes, the initial reaction for Euro was very volatile to the downside, however, it recovered overnight and today Euro was even going up. When the significant bad news could not let a stock or currency go down further, it usually means very bullish for it. This is also consistent with the technical setup for Euro as it is currently very oversold for quite a long time. I think Euro is due for a dead cat bounce, potentially quite strong one. I won’t be surprised to see it go up to test $1.20 again. If you also believe so, it is time to buy FXE or more aggressively EUO put options. Of course, this is a short term speculation, may be just for a couple of months.