My pick: Stay short euro-Aussie, short euro-dollar
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: A few hours to a few weeks
As global central banks diversify away from the US dollar, and as the Eurozone continues to progress from the depths of its crisis, we may be witnessing the start of the euro as an alternative safe haven. Price action among the forex majors last week supports this. If the economic data improves, then the conversation can shift back to the euro gaining ground amid growth speculation. Its financial underpinning, beyond the weak economic data environment, is also soft. Interbank lending rates have continued to push higher. In light of this, there is little evidence that the European Central Bank’s threat of QE will disappear, leaving the euro vulnerable should economic data improve elsewhere around the world.