Several weeks ago, we pointed to extreme amounts of bearishness toward the euro as reason to expect a natural "relief bounce" for the world's most hated currency.
This week, our "bounce theory" was trashed. After the tiniest of upward moves, the euro was slammed to a fresh 10-month low this week. This is a serious development for the debt-saddled Euro Union.
Old-school trader wisdom says when an asset cannot rally from a deeply oversold and deeply hated condition, it's a sign of extreme weakness... a sign the thing could even blow up.
The market always leads the news... so expect serious "default" and "bailout" headlines ahead not just from Greece, but other European nations, as the euro fabric comes unwound.
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