Update 9/5
This has been the best chance I have had in nearly three months to make this position do some work. I have just closed the mid-placed of my five shorts for +27pips.
Just because the euro has been static it does not mean this has been a mistaken position. Rather, it has come in very useful in providing the hedge against my long GBPs.
Because I am diversifying away from the euro in light of the political situation, I am seeking to replace my closed trade with a short CHF of some sort, the CHF acting as a proxy for the euro as long as the SNB keeps active.
Most people seem to be expecting a retest of the Jan lows this month, so I am hoping to close my two poor January shorts for evens and profit from the two good February ones. The euro can't disintegrate while Greece has not got a government so my worst fears will not imminently be realised.
Pip! Pip!
HP
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Update 16/2
Well that was all most encouraging. The weekly downtrend, clearly defined though it is, has just been broken by a scarcely justified news spike. I have added a further short at 1.3050, thinking that 1.31 would not be reached. The market has gone on to prove me wrong, as is it's habit. Because this trade is less than perfectly timed, I am minded to close it early. Responses to news seem unusually febrile with the politicians promising yet another bail out agreement over the weekend. Really anything can happen before then, disbandment of the euro, the abolition of Greece, the remergence of communism. I wish I was joking but things do look a little bit silly.
Update 7/2
My "Yet another short order added at 1.3240" has been hit. These shorts are starting to look rather contra-trend but the fundamentals are conspicuously in favour so I, and the rest of the world, continue to be patient.
Update 2/2
Yet another short order added at 1.3240 in anticipation of a spike above this week's highs.
The length of the risk rally seems to relate to the length of the Greek haircut talks, no news being good news. Would it be too much to ask for the combatants to announce something, anything, over the weekend so the rest of us can stop guessing the outcome?
Also, I notice that positive employment results from Germany in contrast with those from club Med invalidate the concept of the single currency. Just saying.
Pip! Pip!
HP
Update 24/1
A new and larger short added at a smidge above 1.30 following topping at 1.3060. Still expecting normal service to resume towards 1.26 on Greece, Portugal.
Update 19/1
My short at 1.2870 has been bayoneted and run through, upward momentum confounding my view of European prospects. Now the downtrend has been bucked, the risk is of short covering up to, what $1.37? A retracement of that height would mimic the October 2011 short squeeze.
I love a good squeeze though, and benefitted hugely from the October one in spite of some equally badly timed shorts then as now. Is that really happening again? The downturn of Oct 28th resulted from the failure of Euro-Greek talks. Seeing what everyone makes of the Greek shearings tomorrow and at the weekend will tell us whether history is repeating itself and in what fashion.
This time a bad outcome is expected. Even so, my speculation is that the damage to the euro will be related to the severity of the haircut. Some of the goodwill which resulted in successful bond auctions this week might be undone if the talks fail.
If there is some sort of happy outcome, I'll hedging out the uptrend and adding to my shorts once I think a peak has been reached. It worked before. What would a happy outcome look like though? Berlusconi's transplant? I don't think any of us want our shorts squeezed like that again.
Pip! Pip!
HP
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Update 17/1
The euro seems determined to struggle up to the top of it's trend channel, at 1.2870 ish. My short order lurks there hopefully, along, I suspect, with everyone else's. The trend is rather obvious and the fundamentals still favour shorts.
All this optimism makes my original short looks pants so I have closed it for 30pips profit and struck a new one, twice the size, a tad higher at 1.2270. If the euro drops, I'll be in profit. If it keeps up it's inexplicable rise, I'll be increasing my position. There is a burst of US data at the NY open tomorrow which might make for entertaining spectating.
Pip! Pip!
HP
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This idea has been fully documented, see @BigPippin and @PipCrawler for excellent commentary.
I have jumped in after the ECB's announcement at what I anticipate might be the day's high at 1.2767. The risk to this trade is of further retracement to 1.29ish but with the prognosis being so unremittingly gloomy I feel an overwhelming need to be short. Besides, I need to hedge my long cable, which frankly looks like a right old Horlicks.
The future of the eurozone seems to pivot about (amongst other things) the French bond market. With M. Sarkozy being too busy shinning up Carla Bruni to do his economics homework and the AAA rating under threat, the Frenach bonds seem to alternate between euro-core and euro-periphery status.
Can anyone please recommend a data feed or online charting service for the world's bond markets? I'd love to watch more closely than I do.
Since I have been typing this trade has zoomed into the black, which in an encouraging sign. It's about time I got something right this year.
Pip! Pip!
HP
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