By Gavin M.
The EUR dropped after the tape bombs started coming earlier in the morning. However, it stopped short from taking out stops near 1.1100 and all the other related crosses. Why did that happen? Because people have HOPE. There is a group out there who really think that a GREXIT would be good for the EU and EMU overall. I would be inclined to agree that it is, in the long run.
However, markets are very short term and not knowing the real effects of a GREXIT or a No-Deal weekend, I would not be so crazy going long a currency that has so much uncertainty surrounding it. In this case I really think that if Greece does not have a deal and does default on Tuesday, there will be panic in the EUR and corresponding equity indexes like the DAX.
The knee-jerk reaction for surprising events like this is to sell. Unless of course, you have the ECB and their legion of algos at the bid stopping the decline. I would like to think the market will do the right thing in this case. A man can dream.
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