But I’ve completed the comparison and it revealed nothing
that my original analysis had not already suggested. The key time to watch for
this currency are:
·
Around October and November of 2013 – this period
chows up in a number of individual countries
·
The period March through June in 2014 –
particularly April – this period is highlighted in all 6 countries I reviewed.
·
August September 2014 – there is less focus in
the original countries in this case but it still stands out in its own right in
the Euro chart as being a time to note.
With these confirmations I feel confident in posting my original
forecast unchanged.
The trials of the Euro over the last couple of years need no
introduction. However, it is the continued existence of the Euro, so far,
despite the tidal wave of negative sentiment, to which we should pay the most
attention as we look at its prognosis for the coming few years.
Having passed through a very tough patch – with the major
configurations hanging over the key points in the currency’s chart in the last
years we know see these impacts waning for a while. That is not to say that the
Euro is in the clear- not at all- merely that the focus of any difficulties is
shifting from external to internal factors.
2013
The early part of 2013 shows some stability, indeed we have
already seen some recovery in the value of the currency during January and I
would expect that to continue for the next few weeks despite the fact that
there are still some underlying fears for the future.
However there are still some challenges- which may become apparent in the next month (I was writing in Feb) or so.
But I don’t see much change in the overall picture throughout
the first half of the year. There is a much better feeling about the value of
the currency and stability in that value but it is accompanied by some very
difficult aspects to the currency’s leadership – possibly political issues will
cause internal discord between the members, even while financial issues are
moderated. There are likely to be some particular shocks around May/June
All culminating in external events ( although not
necessarily crisis) in July. Indeed the overall balance of the events look
positive to me. Perhaps indicating a new accord at the political or banking/(bonds?)
level. I don’t see this as the breakup of the currency but if it was it would
be accomplished without too much disruption.
It could mean a subsequent change in leadership of the ECB-
certainly there will be some unexpected announcements around August September
and a shift in the feel of the constituent countries to the currency. This will
begin to have an impact on exchange rates by the end of September.
I expect some drama around the currency scene in October.
Whether this will be Euro led or Sterling or US led I’m not sure at this stage.
Suffice to say it’s a disruptive and volatile time but probably not one to make
longer term bets either way.
2014
March April is another critical point, when the cumulative
effect of global events will shake up
the Euro again. There might be some redenomination of the hard currency. So that by May there really is a
confrontational situation. Surprisingly though, this seems to be when the Euro
countries actually pull together against external forces with a relatively
positive effect.
June is moderately quiet.
But July is another month of adjustment. I’m not expecting massive
volatility though- the themes seem to suggest currency wars but without too
much trend.
If there is a time for a Euro break up, though, this would
be it.
It means the year ends on a note of tricky adjustment and
with a lot of restrictions but seemingly
with value intact.
The global picture is changing as 2015 begins. It is neither
particularly positive or negative for the Euro – just different.
March sees the last of the impact of the major global
configuration on the Euro. And it is transactional rather than value based.
There have been a lot of changes but the themes suggest that there is no big
collapse in value – what has changed is merely the way of operating.
As a result there is quite a lot of trading activity in May
and June.
Over the summer there is a mix of themes; value settles down
but there are challenges to trading. These challenges result in a huge amount
of volatility around October . There will almost certainly be big changes in
the value of the Euro to the dollar then, although they might be short lived.
There are some parallels at this time to the period around
September 2008- but the likely effect is unlikely to be much more a lack of
direction rather than the establishment of a trend. What we are seeing now is a
reactivation of some of those earlier themes for another year or two.
As a result, early 2016 is very important. This is the peak
of the ‘currency war’ aspects.
There is significant and volatile trading throughout the
first quarter of the year and to a lesser extent throughout the whole of 2016.
There are stabilising influences on the leadership though.
And there might be a tendency to wait and see how things play out.
Little changes in the second quarter, although the themes
are not magnified by events so much them. Indeed in June it looks as if the
focus is elsewhere altogether.
In August /sept there is more focus on debts again, and a
period of volatility follows, as well as a period of sudden acts and statements
by constituent countries.
The volatility continues into October . But the Eurozone is
being relatively positively viewed at this time. Debt might even be eroded by
inflation, understated or otherwise dissolved at this time.
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