EURUSD- Political Parody will Bring EURUSD ParityEURUSD has been in a downfall.
A lot of you that discuss with me simply seem to not be able to 'understand' how on earth euro can come close to being in parity (1:1) with the USD... that reality is unfolding closer to us every day.
Our greatest call last year was the peak of EURUSD at 1.232 last year:
Back then our target* was the 1,18 and 1,12 but that had to be revised to parity (1:1 ie 1 euro is 1 usd) gradually for 2 main reasons:
The first one is European Unions inability to act fast on monetary policy.
Federal Reserve, after Bank of England and others have increased rate. Europe is always late to take decisions.
As we like to say, Europe is a Large Ship that takes time to turn.
I like to think of EU as a large CRUISE ship that will take us fun places and bring European culture together (I am a European, I like to be one with all European nations in the family, we share common values and we like to watch Casa de Papel together but not the Eurovision any longer)....
... reality is that sometimes we feel like this is the Titanic though! Old and rusty, bureaucratic as it gets with 2 main problems arising and thus pushing our target* even lower:
- Dependency on Russian resources (oil, gas, even food) and the War in Ukraine.
Europe failed to play a role at resolving this crisis as it could. Instead, EU has to suffer on low, incompetent leadership
- BREXIT and 'Stay-xits'
Great Britain leaving the EU was quite a blow. I am not into politics but somehow I feel that the Old Empire would like to see the French, Germans and the rest suffer. Britain's action in Ukraine (throwing oil on fire) contributes towards that (and the USA off course, same policy, let them fight, yes)
Finally the 'Stay-xits' which is a term i came up with today is nothing else than the countries that fail to comply and follow the EU line of policy:
Hungary not doing this, Serbia not doing that, Baltic states pushing for their own agenda, Poland looking after themselves.
Yes, it is such a European thing to 'disagree to ever agree' and to have different opinions but isn't that a bad sign?
Isn't the absence if a European army the best illustration of this?
Eu is dependent on Russia for energy and food, dependent on the Anglo-Saxons (GB+USA) for safety and unable to safeguard it's own RIGHTS with it's own POLICY!
All of the above do affect the value of the EU's currency; the Euro will keep suffering. It will keep us wondering if it is a Huge Cruise Ship or the Titanic...
One Love,
the FXPROFESSOR
ps. eurusd short hedges nicely with eurtry long
