I've always been fascinated by the Forex Market as it has been one of my passions through my teenage years, college and my professional life. I have even had the luck of working with a Forex related Financial Firm for six years and learn (and earn) so much from the interesting currency exchange market.
Last week was one of those rare occasions in which a lot of eyes in the financial world turned to a specific currency and wondered whether if "this is it", that is, the end and the beginning debacle for it. The case is the Euro, who for the second time in the last couple of years found itself trading at the rate of $1.22 per Euro, a value that hadn't been touched since July 2010.
Recent trend in European economics are putting a lot of pressure in those who own the currency, given the fact that they have several elements to worry about in their hands: the faulty Greece bailout, the current issue of Spain's bailout, Ireland's and Portugal's terrible financial numbers; in essence, one could say there is a lot of skepticism and lost faith in the Eurozone.
I have watched countless debates, where economists state the reasons why the Euro will survive, and many others where it is affirmed the failure of the Euro is imminent. I guess everyone has reasons to pull towards their respective side. In my opinion -that is, the opinion of a technical analyst-, there are two key values that hold Euro's fate: the 1.22 and 1.16 support levels. Whether if it's cycles, Fibonacci, Elliot waves, ratios, whatever methods you use to analyze the financial markets, any consistent close underneath the 1.22 support, will likely signal a trend towards 1.16. Furthermore, any consistent close below 1.16 will probably be enough to begin a trend that will send Euro towards parity with the US Dollar. Man... this means I have to bring my reserves back from my European savings account!
Now the big question is: Will this happen? What will happen? When will it happen? The only one who has the answer of those questions is our friend TIME and no one else. It doesn't matter how well involved or connected anyone is in the market, I believe that there are too many interests and variables related to this puzzle, that would allow anyone to make a fair statement on the future of the Euro.
So sit back, relax and enjoy the ride.
