The market's dominating belief continues to be that EURUSD cannot fall a lot lower than 1.00 to the Dollar. 0.99 - yes. 0.98 - possible. Anything lower is seen beyond the realm of realistic. This is why with all currencies declining vs the dollar, the EURxxx crosses keep climbing to new local highs. The market keeps buying the potential bounce in the Euro, which in everybody's opinion is almost imminent.
This bubble of belief will pop very soon, and EURGBP hints that the time is next week. I said it before, I will say it again: the Euro heads to a lot lower than 0.80. I think 0.75 is almost a given at this point.
Not only the Euro will fall, but USDJPY will crash to 100 at the same time, creating an unprecedented swing in FX volatility. This will not happen in isolation: Treasuries are the cause of the coming trouble. When TNX hits above 3.50 and resumes its journey to 6..7%, all of the above will be consequential.
This bubble of belief will pop very soon, and EURGBP hints that the time is next week. I said it before, I will say it again: the Euro heads to a lot lower than 0.80. I think 0.75 is almost a given at this point.
Not only the Euro will fall, but USDJPY will crash to 100 at the same time, creating an unprecedented swing in FX volatility. This will not happen in isolation: Treasuries are the cause of the coming trouble. When TNX hits above 3.50 and resumes its journey to 6..7%, all of the above will be consequential.
