Is It Time to Buy the Euro?

Today, the euro is showing some fight, struggling its way toward 1.4000 in forex trading. That level still remains a ceiling, but the euro is doggedly headed toward getting through it.

However, there are a number of issues standing in the way, since there are reasons that the euro is the worst performing G10 currency right now. But that could be changing. GFT's Kathy Lien looks at the promise -- and the perils -- of the euro in FX360:

Since the beginning of December, the euro has fallen over 7 percent or more than 1,000 pips against the U.S. dollar. Such a sharp decline in the currency will certainly attract bargain hunters. However, in the forex market, trends can last far longer than most of us can anticipate. Forex trading is an expectations game and until traders or investors expect things to change, it probably won’t.

Clearly, in order for the euro to make solid gains, it will be necessary for forex traders to change their view of the 16-nation currency. However, issues with Greece will need to be resolved, and the euro zone will have to show that it will not be lagging behind the U.S. in an economic recovery.