Traders chasing the Euro's bounce should listen to the market itself instead of the bullish headlines that marginalize the consequences of a Greek -- or any other EU member -- default.
According to the Irish Times, the EU is said to be considering a plan for Greece in the event of a Euro exit. Euro leaders view a Greek withdrawal as politically and economically 'containable'.
European officials are considering mechanisms to ring fence Greece both politically and economically in the event of a euro breakup, in order to shield the rest of the currency bloc from the fallout, one of the people said.
The Euro's structural flaws make shielding the euro zone from a broader contagion a pipe dream supported by opinions rather than the message of the market. If Greece, Britain (Brexit) or any other EU member exits, devalues and begins to recover economically, higher-profile members will be pressured to do the same. That pressure will intensify as the business cycle enters full-blown liquidation in 2017. A major Euro Zone panic is only a matter of economic activity, confidence and time without meaningful structural changes. Implementation of changes is proving difficult for a union grappling with political inertia and an evolving social movement from cooperation/(trust) to separation/(distrust).
At this point, the majority is not interested in the Euro or potential trouble within the Euro Zone. Grexit and/or immigration crisis events positioned as containable through laws and rules implemented by leaders lacking skills in practical economics will struggle to find workable solutions as economic and social strain grow.
Investors, largely driven by emotions instead of discipline, tend to focus on volatility rather than on what the market is saying. And that tendency prevents them from recognizing better opportunities in quieter markets.