Euro remains in limbo
The European currency (EURUSD) remains in the downchannel that has been its home for the last 6 months or so and against a backdrop of increasingly uninspiring rallies it is difficult to see any future breakout disrupting this trend. The current channel is between 1.11 and 1.1350 so there is plenty of room to trade the range in the immediate future but it is becoming increasingly difficult to imagine a scenario in which confidence is restored to the European currency. The fragility of the German economy as indicated by recent economic data can only add to the concerns surrounding the Eurozone economy as a whole and the shadow of the UK’s desire for departure can only be avoided for so long. Our preferred strategy for trading Euro would be to sell rallies rather than buying dips, because we feel the risk to the downside is significantly higher, and whilst getting caught long won’t necessarily be a “Black Swan” event it’ll still be likely to tie up capital and cause heartache until the market provides an opportunity to escape with minimal damage.