The euro touched a three-month low earlier today before recovering slightly, but don't get too comfortable.
"It's going to go a bit lower," said Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank.
When Germany announced this morning at the European Union summit that it is going to balance its budget sooner than planned, it wasn't entirely surprising, Bourdeau said. Germany's commitment to austerity is well known.
But other countries like France and Spain "are really hurting on the austerity front," she said, and they would prefer discussion of more stimulus and less austerity.
"The market is looking for more tailored solutions for each state within the euro zone and we haven't seen that yet," Bourdeau said, and that's why the euro is likely to sell off some more.
So Bourdeau wants to sell the euro against the dollar at 1.2970, with a target of 1.2800 and a stop at 1.3050.
One note of caution: Bourdeau points out that the Italian parliament will be meeting Friday, and they have yet to form a coalition government. That could create some negative headlines, she says.
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