Paradigm Shift: The Euro Gains Trust in Uncertain Times

Closing positions to lock in profits ahead of the Easter break could also keep the euro in a defensive position in the short term. However, beneath the surface, a structural shift may be taking place — more and more investors are starting to view the common currency as a safe-haven asset.

The euro just posted its fourth-largest weekly gain since 2011. Its two-day rally, which began on Thursday, was the strongest since 2009. After such a sharp move, it is entirely normal for traders to begin cutting long positions — especially following recent changes in customs policy.

However, the broader picture seems increasingly positive. Options markets show positioning for further growth, and data from the Depository Trust & Clearing Corporation indicates that some participants are already targeting levels above $1.20 this year.

Charts also point to this optimism: the euro has broken through a downward trendline that has been in place since 2008. If demand picks up again with a potential retreat to $1.12, it could be a strong signal that the currency’s upward reversal — and its changing role in global portfolios — has long-term potential.