Today the euro set a new 12-year low, touching intraday USD1.0493.
That was slightly lower than I thought the single currency would decline, and it took the euro less time than I had anticipated. Nevertheless, the euro is now trading back above USD1.0600 and the greenback´s rally is taking a breather.
Although the single currencies long-term downtrend versus the greenback - since July 2008, where the euro hit its all-time high at USD1.6063 - is fully intact, there is a good chance of a stronger pullback. Not only because the currency pair bounced off a support line, but simply out of the fact that now PARITY as a possible target, became more and more ´en vogue´. Even though it might not be a valid technical argument, history has proven that when it looks the worse things might take another route. This might be a dangerous bet as the trend is your friend but oversold stays oversold.
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