Having fallen by almost 20 per cent, how much more bearish can the Euro go?

The result finally came out as Greek anti-austerity party Syriza won the election, making the outlook for the country’s political situation and economic future murkier. The Euro dropped refreshing its 11-year low again to 1.1097 at the beginning of Monday’s session. However, profit-taking helped the Euro rebound to 1.13 as most participants had expected the outcome. The Euro has lost over 500 pips against the Dollar after the release of 1.1 trillion Euro QE program.

No matter how we look at the Eurozone, from an economic prospect or from interest differences, the outlook of the Euro is still bearish. Even though, the Euro Dollar has fallen 19.4% since its high in May 2013 and technical indicators show extremely bearish signs on this currency, would it still be wise to short the Euro? Traders should be alert as most market expectations have been realized and an adjustment may be right before us.

Gold prices slumped 1.4% from the day high of $1298.9 to $1280 per ounce yesterday as two major events – Eurozone-edition QE and Greek election were over and the safe-haven demands now fades. A short-term top seems to be under way as the $1300 resistance blocked the rally of gold prices.

Back to stock markets, the Shanghai Composite rose 0.94% to 3383. The Nikkei Stock Average lost 0.28%. In European markets, the UK FTSE was up 0.29%, the German DAX gained 1.40% and the French CAC Index rose 0.74%. The US market rose slightly in a light trading day due to the heavy snow storm. The S&P 500 closed 0.26% higher to 2063. The Dow closed flat at 17672, and the Nasdaq Composite Index gained 0.29% to 4772.

On the data front, Australian NAB Business Confidence will be released at 11:30 AEDST. The UK Prelim GDP will be at 20:30 AEDST and US durable Goods Orders will be at midnight.

Have a great trading day!

NB: Please note all references to rates above are approximate

To learn more about Anthony Wu, read here.