Strategy Video: The Best Case EURUSD Bull Scenario Not Very Bullish
• Hope for a Greece deal is the Euro's 'best case' scenario, but its outcome may not carry bulls far
• Alternatively, a deferred rate hike from the Dollar still leaves it in a better position than most
• Asymmetrical scenario impacts mark the dominant trend for EURUSD
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Is the EURUSD's recent rise an indication of a lasting trend or is it a limited correction in a bigger bear trend? There are a number of technical and fundamental variables at play that can materially redefine the progress the benchmark currency pair takes. However, reviewing the charts and fundamental backdrop, a potential gap arises that may establish where trend and momentum will ultimately catch. For the 'best case' (though still reasonable) scenario for the Euro, a resolution to Greece's immediate funding troubles is a meaningful possibility. However, how much strength would a few months of financial stability afford the currency? Long-term Greek economic issues (debt and growth) still remain, broader Eurozone economic malaise, a proclivity to risk aversion and a leading QE effort are prominent counterwinds. Alternatively, the Dollar's 'worst case' scenario is a deferred rate hike. Yet, even pushing back liftoff leaves the central bank ahead of the pack. We look at the opportunity and trends extreme scenario analysis can establish in this weekend Strategy Video.
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