Euro may bounce back next week. Why so? There are 3 major events, which may potentially benefit Euro, although only temporary.
- The German Parliament is going to vote to decide whether they will agree to grant the next tranche of money to Greece.
- The Finnish parliament is also going to vote regarding the aid to Greece.
- Greece herself will vote again to decide whether they will agree to continue with the required austerity measures.
As we all know, no one is happy these days in Europe. Greece has virtually defaulted already. It is surviving only technically speaking with all the life-saving money from others. But they must meet strict austerity measures, which their own people really hate and want to fight against. But can they really afford to say No for the austerity? I don't think so. The German and Finnish people are also hating so much about the charity money they have to give to Greece when they themselves are facing serious economic problems. But can they also afford to say No? Their politicians certainly know clearly what it will mean if they do so. It will mean a sudden death of the Eurozone, which will also mean a catastrophe to the world financial market.
Although anything can happen, I really don't expect this will happen next week. Everything will be fine and Greece will get their money to survive for the next few months. An inevitable death for Greece is delayed again and they can live a bit longer. Wow, a big relief rally will likely occur to Euro. But it is only a relief, nothing has been resolved. I think Euro may bounce back to around $1.38 or so. At that level, I think it is a great opportunity to short Euro. You can do so by buying EUO, or better by buying EUO call options.
The can has been kicked down the road and there is no way back. The gravity is doing its work now to bring it down further and further. The Euro is done, at least to me!
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