EUR/USD is digging lower every day and feels comfortable under 1.20. Where next? Here is the view from BTMU:
Here is their view, courtesy of eFXdata:
BTMU Research discusses EUR/USD outlook and notes that while technically downside could extend to 1.18, such a move if materialized would likely to prove temporary.
“Technically, the dollar has broken the 1.2000 level yesterday could have further to run in the short-term. The 38.2% retracement of the move up from April last year to the high in January comes in around the 1.1800 level where we would expect to see stronger support materialize. But with 56bps out of a possible 75bps (3 more hikes) of tightening priced at this stage, we see the US yield curve as well priced, BTMU argues.
“We have abandoned our call of the ECB hiking rates for the first time in March 2019 and this change is reflected in a slightly lower upward sloping EUR/USD forecast profile than in April…We assumed at the start of the year that EUR/USD would consolidate in a 1.2000-1.2500 range in H1 2018 before breaking higher. Any downside breach of this range is likely to prove temporary,†BTMU adds.
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