Forex Trading: Soros ‘Euro breakup would cause Global Meltdown’

by Joe Oliver, Forex Trading-Pips

Forex Trading: According to a recent Newsweek article billionaire George Soros said “the euro must survive because the alternative, a breakup, would cause a meltdown that Europe, the world, can’t afford”.

Many traders have been betting on the demise of the Euro in recent weeks, with short interest on non-commercial spec contracts recently hitting record highs.

Net CFTC

Net CFTC

 

 

 

 

 

 

 

Despite the recent increase in short interest the Euro currency has risen close to three-week highs versus the US dollar.

Forex Trading Euro currency daily bars

Forex Trading Euro currency daily bars

 

 

 

 

 

 

 

Divergences and spikes in Open Interest / price can be helpful in spotting potential turning points in the short – medium term trend. It is still too early to say whether a European resolution is forthcoming, however one thing for sure is that many traders have been caught wrong footed by the  ‘short squeeze’ in euro currency over the past few weeks.

At Forex Trading-Pips we like to trade in the direction of the long term trend, indeed our trend following filters mandate this, however we also employ a number of shorter term systems which can help to ride out counter trend moves and smooth out our equity. Weekly volatility breakout strategies can be used very effectively for this purpose.