Well, thanks for Mario’s negative-er interest rates, the Euro is in a free fall. I’m pleased to see this, because I’ve been harping endlessly on shorting the Euro over in Slope Plus-land. My initial “heads up” about this trade was on July 16th, when I showed the break in this trendline:
A little while later, a clearer pattern formed, and I was able to offer up a measured target on the FXE…….
And, more precisely. on the EUR/USD cross-rate. Notice how the spread from the horizontal line to the peak matches the spread from the horizontal line to the target price, represented by the green, lower horizontal.
So as nice as this “success story” is, I note (with more than a bit of surprise) that this short trade is exceeding even my best expectations. The euro is melting before our eyes. It’s pretty obvious that Mario is better even than Janet at turning his currency into toilet paper. The toilet-paper slugfest between Japan, the U.S., and Europe should be quite a stomach-turning sight as they all continue to race to the bottom.