When Will The Euro Bottom?
The euro bounced on Monday but will euphoria generated by the $1 trillion bailout be short-lived?
From what we can tell, the consensus suggests the euro isn’t going to make any appreciable moves to the upside anytime soon.
According to a Reuters poll, analysts continue to pare back forecasts for the battered currency.
The poll of 58 analysts, taken April 29-May 5, predicted the euro would slide to $1.28 in a year. By contrast in a similar poll taken in February's the euro was only expected to be at $1.40 in a year.
In a Bloomberg report, Mansoor Mohi-uddin of UBS says "the euro will definitely hit what we call its long-term fair value at $1.20 and it may easily overshoot that if difficulties in Europe persist. The policy mix in Europe is becoming very unfavorable to the currency.”
Meanwhile, OptionMonster and Fast Money contributor Jon Najarian is even more bearish on the currency. On the Halftime Report he said, “I see no reason that the euro doesn’t reach parity to the dollar. (That means $1 – 1 EUR)
”There’s nothing that happened over the week-end that leads me to believe the euro should be getting stronger,” Najarian added.
And on our 5p show, Todd Gordon of Forex.com agrees that there’s more pain to come. Patterns in the charts suggest to him the euro will go to 1.13. And from there parity is the next important level, he adds.
*To see the charts used in Gordon’s analysis please watch the video.
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CNBC.com with wires