The Euro Bounce

It looks like the euro will rebound now, with the first leg down completed. Based on a Fibonacci retrace of the decline this year, the $1.31 area is probably the furthest it will go, though I expect won't make it far beyond the mid-$1.20 range. I'm not interested in playing the rebound though, I think this will offer chances to add to ProShares UltraShort Euro (EUO) and eventually go back into double short ETFs such as ProShares UltraShort Europe (EPV).

In my Marketocracy portfolios, I added to existing EUO positions today, in case this is just a spike. I plan to continue slowly adding if the euro continues to rebound.

The wildcard here is the politics. On the positive side, good news will just be a part of an overall rebound in the currency, but in the back of my mind, I'm still wondering if some European government won't send the euro tumbling again with an ill-timed announcement.