When the euro breaks out of this trend, I expect it to rocket

That the euro has fallen ahead of European money printing is expected, says John C Burford. But a sudden reversal will take many by surprise.

Last year, I said that if and when the European Central Bank got around to doing their own version of QE (AKA money printing), my money would be on the euro reaching a bottom early, then engaging in a strong rally phase.

I had history on my side; that is precisely what happened to the US dollar when the Federal Reserve's QE scheme got under way. The dollar ended higher at the conclusion of its third QE programme than when its first QE programme started.

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(Contracts of EUR 125,000)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 431,217
Commitments
45,511223,2476,845343,315116,354395,671346,44635,54684,771
Changes from 02/17/15 (Change in open interest: -7,194)
-1,664-9,510-655-5,8864,795-8,205-5,3701,011-1,824
Percent of open in terest for each category of traders
10.651.81.679.627.091.880.38.219.7
Number of traders in each category (Total traders: 227)
4691345462115172Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.