Chart 1: European Euro has become extremely oversold vs the Dollar!
Source: Short Side of Long
The European Euro originally came afloat against global currencies in the late 1990s, so we do not have a lot of data to go on by. But one thing is for certain, the currency is currently at one of the most oversold levels it has been since 1999.
The quarterly performance (green line) shows a persistent oversold condition at almost 2 standard deviations away from the mean. Furthermore, annualised performance (blue line) shows the second most oversold level, well below 1.5 standard deviations away from the mean.
With these two points in mind, one could argue that the European single currency has only been more oversold in early 2000 and late 2008, both marking major bottoms.
