The past year has been rough on the EUR/USD. How bad was it? The bottom section of the above chart looks at the 52-week rate of change on the euro, which shows that EUR/USD had its worst one-year decline in its history.
The decline has driven the EUR/USD to a potential cluster of support (top red rectangle).
The historic decline in the EUR/USD has had a big impact on sentiment. The chart below from Sentiment Trader, reflects that just 19% of investors are bullish the Euro at this time.
Does it seem crazy to think that the euro could actually bounce? I can understand if you feel that way, as the trend for sure is lower at this time.
I like this theme…its not the odds of something happening that is key, its the impact if it does. The odds might be low that the euro rallies, but if it does, the impact could be rather big since such extremes are in play.
If the euro does rally, odds are decent that the metals complex -- gold, silver and the miners -- will benefit.
Stay tuned, friends, this could get interesting. If the euro does rally, it would surprise a lot of investors, 89% of whom are now bullish the USD -- and that's a record high.