Several arguments in favor of euro purchasesThe recent decline of the euro is the result of several fundamental reasons. The elections in Italy and the formation of the Italian government (populists who do not support the idea of the united Europe) has caused many doubts about the prospects of not only the growth of the euro, but also the fate of the euro as it is (from the Italy we even heard statements about exit from the euro area and the rejection from the euro). In addition, a series of rather weak macroeconomic statistics from Europe also contributed to the disappointment of investors over a single European currency.
The result of this was a full-fledged correctional movement in the prices for the euro. But it is a corrective movement, not a downward trend. If you look at the daily chart of the Euro Index (EURO CURRENCY INDEX), you can see that the base was and is still there an upward trend, which began its formation more than a year ago. The construction of the Fibonacci retracement grid allows you to see that the current values of the Euro Index have come close to the zone 38.2, which is traditionally considered as one of the key levels of correction. Considering that in the 117 area the Euro Index has already formed serious technical levels (4 times during the current trend there were reversals of the price movement), we get a very strong confirmation signal in favor of the fact that from the current values the probability of the euro rebound is extremely high. In addition, the strongest daily oversold of the Euro Index (see figure above) is another additional signal in favor of the fact that correction in the euro is just around the corner.
As for the fundamental negativity, we consider the populist statements of the Italian populists what they really are - a shaking of the air without any material consequences. That is, there is no global threat to the euro.
Thus, we consider the current prices for the euro is almost ideal for purchases, since the likelihood of the growth of the euro from here is very high. At the same time, risks for buying euro are rather insignificant (about 1% of the price), but the potential profit can be up to 10% (without leverage). That is, the profit / risk ratio is extremely attractive. Our recommendation is the purchase of the euro.
