New 2012 lows for Euro

Posted by on May 23, 2012 in Commentary, Featured, News

New 2012 lows for Euro

It must be some kind of justice that the Euro is currently trading near the lows for 2012 against the US dollar on the eve of another EU summit. As I write, the Euro has just set a new low for the year, heading below 1.2600 for the first time and setting the lowest rate for the currency since August last year.

With continuing disagreement in the Euro about substantive measures to solve the problems in the Euro area, this level of trading can only be indicative of market expectations for the EU summit later today. The more that heads of government talk about keeping Greece inside the Euro without any credible measures to ease the strains within the Euro area, the less the markets view the Euro as a strong currency.

If I were intending a running commentary, I couldn’t have chosen a better moment, as the low from August 2010 has been breached. July 2010 levels of 1.2500 are now in sight and the Euro seems to be in free fall. The lowest the Euro has traded against the dollar since the financial crisis of 2008 is in June 2010, when it traded as low as 1.1875.

Short term and longer term, trading opportunities on the Euro are selling the Euro in favour of the “safe haven” of the US Dollar. But don’t ignore the potential for pull backs as buying support emerges from time to time. For forex traders, strong directional currency moves like these signal good times.