Euro is in free fall mode and the picture says it all. There has been 9% decline in Euro in last 5 months and that's huge by any standards.
Here's the Daily Chart
The chart is as of yesterday. The CMP is 1.258. And the big question everyone seems to be asking - where will this end? Technically, it looks oversold...but does it matter. This is the kind of chart that tells you why one should never search for bottom. Never catch a Falling Knife.
Here's where traders will be looking for some stability in Euro
Euro Monthly Chart
Interestingly - on last two occasions - Euro decline got arrested near 1.21-1.22. Will it be same this time? We don't know but traders would be watching at some support near 1.22. Remember, nobody will rush to buy at 1.22 but yes there can be some short covering around that level.
The stuff to watch: What Euro will do after that? Are we looking at long term structural decline of Euro. In that case - a breakdown below 1.22 cannot be ruled out.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers