More Pain for the Euro

Published on
May 31st, 2018
10 minutes

More Pain for the Euro

Trade Ideas ·
Featuring Joseph Trevisani

Published on: May 31st, 2018 • Duration: 10 minutes

Joseph Trevisani, Senior Analyst at FXStreet, explains why he expects euro weakness to persist. He discusses the catalysts and the key levels to watch in this interview with Justine Underhill. Filmed on May 29, 2018.


  • CJ
    Craig J.
    20 June 2018 @ 09:02
    This trade idea needs more objective facts to support its case. The current presentation is mostly just opinion.
  • NG
    Nick G.
    1 June 2018 @ 11:30
    This series needs to be discontinued. It adds nothing. Either show a .pdf of the guy's broker statements and position (proving that he has skin in the game) or just kill this series. Or get better guests. Suggesting a 3 month trade (his words) and having a stop loss of less than 2% shows this guy is just not serious. Just like the guy who got long GC at 1320 with an 05 stop for 3 months. He was "stopped" in 3 days. And this guy will be stopped in a week. The problem with this series is that anyone can bullshit about some short term trade. It's 50:50 after all. Yet to hear a sensible entry and exit point from a single contributor. Won't even get into his reasoning for the trade, which imho is complete rubbish. But that is a matter of potential debate. His stop loss level is not. It is factually silly.
    • JM
      Jay M.
      1 June 2018 @ 23:25
      I concur. So far have not picked up a sensible idea from this series. This episode was especially bad researched. 55% of Italians want to remain part of the Euro. The President has a constitutional right to deny a minister. I am not sure that mass producing content is adding to the quality currently.
    • JO
      Jens O.
      3 June 2018 @ 04:58
      Totally agree ... There is no innovation in this format by bringing "hot tips" from writing to video ... The "Go Long Cocoa" idea from end of April nailed the top to the day! Currently down ~20%, forming potentially a more bearish pattern - so now what?
    • CJ
      Craig J.
      20 June 2018 @ 08:54
      The main value I see in this series is hearing how some guests construct their trade ideas. Before following anyone, I want to see a track record... so I've kept an excel sheet to get some metrics. For now, Louis Llanes and Chad Morganlander have been the best performers.
  • zy
    zhang y.
    7 June 2018 @ 13:23
    When the video was publish usually that I follow a lot the EURUSD I knew we were set for a rebound, and publish a comment saying the stoploss at 1,1820 likely will be taking out, today 7 days later from the day the video was publish, just one week the trade stop out, this video-publish idea was not well timed as Nick D says in a comment below RSI and other indicators for timing ideas was on oversold, the day Tuesday 29 the BTP 3 year italian yield rushing to 3% was an exhaustive move, later was faded, that tuesday the EURUSD have a distance of its 50ma on daily of 590 pips which only happen in rare occasions, these are signals of oversold. I think the arguments that italy is a mess and will ultimaty drive the EURUSD down have some weights and can have its play on the EURUSD later or sooner, but not when in the short term things was such oversold, I think this trade idea will make more sense in a few weeks or either when the EURUSD comes back to 1,20 at that level there is cluster of supply and there it may see new selling pressure. And to add more to it, last friday 08 the ISM PMI and NFP os the US came both better than expected, and despite this good news the market faded, that's what happen when the bigger picture the asset is oversold, the market ignore bad news (ie, good news for US would mean EURUSD down). And putting all together the guy saying things like "eurusd can only go lower" uuhh, how could h be so confidence the EURUSD will keep moving down with such a large moves without having seen a correction...
  • NG
    Nick G.
    7 June 2018 @ 11:21
    Since Roaul said he reads every comment, now that this trade is "stopped", I feel the need to justify my comment from 1 June 2018 @ 11:30, in order not to crow, but to be constructive. I don't want to enter into the rationale for the trade at all. Trevisani might well be still right. I have no idea. I disagree with his rationale, but that means absolutely nothing and IS NOT the reason why I criticised the trade. The reasons for criticism are these: 1. On the day and the level the idea was filmed, EURUSD was trading below both daily and weekly Bollinger bands. RSIs and stochastics were through the floor, indicating deeply oversold conditions. You can count on the fingers of one hand the occasions in the past 50 years when these conditions have persisted without a sizeable correction. Basically the odds were 100:1 this would continue. 2. The move was already 9 big figures, or 7%. The weekly moving averages are still pointed up. Even a .382% retracement (a very common minimal technical retracement) would take EURUSD to 1.1850, above the stop level. 3. We were less than 0.5% from 1.1485 which is a swing point of huge importance for 4 years now, which was bound to be ferociously defended. I could go on and on with technical reasons. But you get the idea. In short, the odds of that trade not being stopped out over the course of 3 months were close to zero. My model calculated them at 1.856%. That is why I wrote my original comment. Giving trade ideas is a BIG responsibility. When someone gives a trade idea on this channel, it reflects on them but also on RV. People might lose real money. Recommending a trade idea at such poor odds of success is not what you ought to be about. And yet, it would have been easy to construct a 3 month trade with roughly the same stop which would still have you in the trade: sell EURUSD, buy a 1.1750 3 month call, stop = 1.1910 good for 3 months (prices calculated on 1 June).
  • WS
    Wouter S.
    6 June 2018 @ 19:34
    I love people with lots of conviction but I start to get worried when I hear “it can only go down” a few times within a couple of minutes. Funny he does have stop loss levels....
  • RK
    Robert K.
    4 June 2018 @ 09:08
    Feel with the guy. Good for him that he is short since feb. I hear the arguments but suggesting going short now after the main action is a bit funny.
  • DP
    David P.
    3 June 2018 @ 13:01
    If that is the best rational for shorting the euro, i am tempted to go long. Can we have a few more short euro segments ?
  • JO
    Jens O.
    3 June 2018 @ 05:10
    Really funny section when we was asking what would happen if the US would experience the same economic environment as Italy did ... Well, didn't you got already your nationalistic and populistic vote 18 months ago? :-)
  • DR
    David R.
    1 June 2018 @ 14:31
    Nice NFP print today, but that's a rearview mirror view. The kneejerk reaction set up another good entry point to short dollar against stronger currencies (euro is NOT among the better FX choices to long against USD). Note that price action after the initial kneejerk up in the dollar is seeing retracement rather than follow through, which indicates weak conviction in the dollar - imho twas a good USD short opportunity; glad I took it.
  • SS
    Sam S.
    1 June 2018 @ 13:54
    I agree completely. The EU never converted all the member debt into the EURO currency and was originally a trade union not a political or monetary union. If it was, the structure would have been different. Lots more reasons too, but this is enough.
  • RG
    Roberta G.
    1 June 2018 @ 09:17
    Italy is not on the hedge of leaving the Euro. First because everybody understand that moving back to the Lira will hit the economy even harder than what we experienced entering the Euro, despite the fact that we will regain control of our monetary policy. Second because M5S+Lega do not have the type of majority needed to call for a Euro referendum: the Italian constitution does not allow a referendum on international treaties and to change the constitution a 2/3 Parliamentary majority is needed. Third because president Mattarella exercised a right given to him by the Italian constitution and as a consequence will not be impeached - it is not the first president asking a prime minister to change someone within his cabinet and he won't be last. He did not do anything unconstitutional and actually he behaved as a grown up, differently from what Mr Di Maio and Mr Salvini proved to be, to try to avoid a long term market reaction similar to the one we had over the last few weeks (which by the way could have been avoided if M5S+Lega proposed a different treasury secretary as they did yesterday). Every country in the EU wants to negotiate a better deal with the other EU partners. That is not the problem. The problem is to make sure you have a grown-up in having a discussion with the EU partners, someone who can compromise and not someone who is an extremist and can only see black and white.
    • LP
      Lionel P.
      1 June 2018 @ 10:27
      Thank you
  • ST
    Simon T.
    1 June 2018 @ 08:16
    This is a pretty bad example of understanding Italy, really from a Wallstreet perspective but not from Italians residents. The vote wasn’t about the EURO but about immigration, safety, tons of bureaucracies, corrupt politicians and anti-establishment
  • DR
    David R.
    31 May 2018 @ 20:45
    @8:40 remaining... Total distortion. The Italian election VOTE was NOT a "vote against the Euro". FACT: Poll after poll after poll shows that Italians overwhelmingly want to retain the Euro. The election was about government, politics and aspects of the EU, **note** a vote against the Euro. As Juliette Declerq explained, Italy is but a tiny problem in Europe. The big problem in the world is the US, which is circling the drain and more likely to be flushed.
    • DS
      David S.
      1 June 2018 @ 06:21
      Like the Greeks, the Italians seem from the news to want the Euro, but they do not want the problems that come along with being in the Euro. The fact that it is so conflated makes it impossible for anyone to really figure out what to do. DLS
  • WS
    William S.
    1 June 2018 @ 01:02
    I up-voted this interview because I thought it was well done, and that Joseph made his argument with admirable clarity and succinctness. That said, (and notwithstanding the fact that I am long-term bearish on the entire exercise-in-futility-from-the-beginning Eurozone experiment) I am still persuaded that, in the short term, the Germans (and the ECB) will "do whatever it takes" to keep Italy in the Euro, and to prevent a disorderly decline in the Euro until the Germans and those willing to be their subordinates in a new economic alliance have readied their alternative to the doomed Euro. In my considered opinion, the Euro currency simply cannot survive (let alone prosper) absent a political and fiscal union of the member states. And I am utterly convinced that European political and fiscal union will remain -- for at least the duration of our lifetimes -- an unobtainable goal for those who so fondly desire it.
    • DS
      David S.
      1 June 2018 @ 06:16
      I agree. The Euro is a political animal and not an economic animal. Germany benefited markedly by being in the Euro, but the cost of the Euro increases each year while the benefits to Germany decrease. Time will tell. DLS
  • JM
    John M.
    1 June 2018 @ 03:42
    Dear RV: There used to be an audio only option at one time. What happened to it?
  • MS
    Michel S.
    1 June 2018 @ 00:51
    Brexit is a exemple that it's a very very hard task to get out of the Eurozone (and they don't even use the EURO). I suspect the Italien mainstream population do not clearly understand the finance aspect of it all. One of my view is IF eurozone crash it will be under his own weight. And only then all members will have no choice but restart there own currency. I don't see that for tomorow. What affecting the euro value is the QE vs USA QT. I will look more on the Italy bond side if I wanted to play this latest even.
  • DR
    David R.
    31 May 2018 @ 20:39
    A close at or above 1.1701 for EURUSD today will be very bullish for the monthly close and likewise a similar close for the week will mark a key weekly reversal with doubly bullish technical implications. Otherwise consolidation. Only a closing below 1.1456 is bearish.
  • zy
    zhang y.
    31 May 2018 @ 10:08
    Honestly I believe there is a good chance stoploss at 1,1820 is taken, there is still a good portion of the market believing in Europe, its recovery and that narrative of "Europe is mid cycle while US is late cycle", plus equities in europe are much cheaper, and with this euro depreciation much atractive, a correction to 1,20 is possible - the intervew filmed on 29 may, the euro touched 1,15 and today is 1,17, europe cpi yesterday and today came better than expecte, their surprise index is at 5 year low, is very low and from here some positivie news can be expected, while the suprise index of us is going down, yesterday macro data for us came negative, and ISM PMI and NFP in FRiday are likely to come negative, all of this popping the euro going higher
    • DR
      David R.
      31 May 2018 @ 20:29
      Yep, plus the DSI registered 97% eurusd bears.... the biggest bearish sentiment in years! EurUsd has sharply reversed and has a shot at 1.40 later. Dollar and USA are going down, down, down. US stocks up, but only in nominal terms, as US assets continue will again be the worst investment of all on a currency-adjusted basis, just like in 2017. DXY initial target of 79-80 in a major 3rd wave.
  • JP
    Janusz P.
    31 May 2018 @ 17:21
    I have no idea where EUR is going and I don't care, I trade what the Mr Market is telling me instead and in cases where I try to outsmart Mr Market I pay dearly. But to all others trading currencies (like me) I want to remind you that you are in fact trading a currency PAIRS, not a single currency, so if you have i.e. a bearish view on the region does not mean that the currency will depreciate in value compared to the other currency. That is especially important with all these crazy Central Bankers out there in the world. So trade accordingly!
    • KH
      Kavi H.
      31 May 2018 @ 19:18
      Hi, Ant ideas what Mr Market is telling you right now? Cheers Kavi
  • MH
    Marc H.
    31 May 2018 @ 12:38
    What about using an etf, like EUO, to express this trade?
  • CD
    Chris D.
    31 May 2018 @ 11:18
    A big bounce is coming for the euro - the situation is never as "easy" as it seems. TP EUR/USD: 1.23 DXY: Going to sub 90, again. TH: 3 months.