For the past year euro-dollar has been prone to attack. But volatility disappeared in 2012.
Lack of venom due to a declining risk appetite amongst financial institutions was the problem. This market was wounded in the wake an implosion of confidence because of the global financial crisis.
A hypnotic spell cast by Mario Draghi and European government leaders has not helped.
In 2012 Euro-dollar posted its tightest range in 11 years while $-Swiss and Cable struck their smallest ranges in 37 years.
This is not a performance reminiscent of the Forex market, it more like a picnic with my Granny, at which, she would have been bored.
1.3000 was the pivot for Euro-Dollar up until May 2012. This year the market has been a lot more volatile and 1.3000 is set to come under pressure in March.
There is little value in my view, in bounces to 1.3200 or 1.3400. Rallies should be sold.
My target in the next three months is last years low at 1.2042.
In my view, Europe will only recover if it follows the wisdom being shown in the U.S and Japan.
Double D… Depreciate the crippling debt through inflation or Devalue the currency.
Europe will not work, its population will not work and the euro does not work until things change.