The European crisis is at a key point this week, and there are meetings galore on resolving it. Here's how to ride them out.
Slowly but surely, though, progress is being made, and the analysts at Barclays Capital are guardedly positive on the euro. All the meetings "will therefore be an important step forward which we believe will lower the risk premium on European currencies in particular. And given current pessimism and short positioning, we are constructive on risk," they wrote in a note to clients.
That said, they are not recommending trades using the euro. The European Central Bank meeting "is unlikely to improve risk sentiment while chipping away at the EUR's interest rate advantage," they say. And if investors are disappointed by the pace of progress toward an end to the crisis, there is major downside risk in the single currency.They recommend entering the trade around 0.92 with a stop loss at 0.90 and a target of 0.98.