Near term bottom or the pause that refreshes?

What are we to do with the euro?

Macro Man has been running short for some time now, doing a little trading around as circumstances warrant.  After the excitement of the past few months, however, recent price action has been downright boring, with tight ranges and little net daily movement.  The question naturally arises whether EUR/USD is trying to form a near-term bottom, or whether this is the pause that refreshes as the pair gathers steam for the next down-leg.

To be sure, recent rumours from Greece have ostensibly turned more positive, as evidenced by yesterday's eye-watering 8% rally in Greek stocks.  Then again, someone once noted that those types of rallies don't occur in bull markets.

Either way, yet another postponement of the day of reckoning does little to suggest any reason to buy the euro beyond short-term profit-taking.   A six month-postponement simply means another date at the danse macabre over the summer.

Kicking the ball further downfield hasn't worked for the Greeks since 2004, and (to repeat a joke made by TMM), hasn't worked for them against the Germans since the Golden Age:



Obviously, a few days of sideways price action does little to dent the underlying thesis behind a short euro position.  Frankly, news of a short-term extension for the Greeks doesn't, either.  That said, it somewhat bemusing that the euro has largely shrugged off both the US employment data and the consequent back-up in rates.

For now, Macro Man is going to stick with his position, which is, after all, manageable.    A little short-term boredom is a lousy reason to trade out of a winning position, particularly when the prospect of a parity party looms somewhere down the road....