A New Buying Opportunity for Euro Traders
There's a new banking supervision plan circulating in Europe, and it is giving finance ministers there a new opportunity for a squabble.
Not surprisingly, the tensions are weighing on the euro.
So does this mean the common currency's run is over?
Hardly, says Kathy Lien, managing director at BK Asset Management. At most, euro weakness right now would be just a bump in the road, she told CNBC's Scott Wapner.
"Overall, I think the reduction in tail risk is going to be very supportive of the euro as you go into the new year," she says. "If we do get a deal on the fiscal cliff, even if it is a benign deal, it may be enough to keep the euro well supported" against the dollar, since a fiscal cliff deal would boost risk appetite and weigh on the greenback.
So Lien is waiting for any euro weakness to give investors an opportunity to get into a long euro position. She recommends waiting for the currency to move down to 1.3000 for an entry point, then setting a stop at 1.2900 and a target of 1.3150.
"This whole euro area finance ministers meeting could be on par the catalyst that takes us lower on the euro-dollar," she says.