EUR/USD suffered a relatively dovish Draghi as well as speculation about a hawkish head of the Fed. Does the pair have more room to fall? Here are two opinions:
Here is their view, courtesy of eFXnews:
EUR/USD: Looking To Set Strategic Longs Near 1.15 On A Deeper Correction – SocGen
Societe Generale Cross Asset Strategy Research argues that in the very near term, the EUR is vulnerable as the highly-anticipated ECB QE tapering announcement is behind us.
“The pieces are in place for a deeper euro correction but the longer-term fundamental case for a stronger euro also bears reiterating Economic growth momentum in the euro area is strong, and we see upside risks to growth next year. Bund yields are out of synch with that growth momentum and will help drag the euro higher in due course, towards is long-term fair value closer to USD 1.30.
“We’re looking to set strategic longs in EUR/USD a 1.15, while we don’t look for even that much of a fall in EUR/JPY where 130 probably won’t be broken before the move towards 140 resumes,” SocGen advises.
EUR/USD: To Settle Into A Multi-Month Trading Range: 2 Reasons – ING
ING FX Strategy Research discusses EUR/USD outlook in light of yesterday’s ECB meeting, noticing that there is limited EUR-related catalyst for higher EUR/USD in the very near-term.
Looking further ahead, ING sticks to its existing base case of EUR/USD settling into a multi-month trading range given:
“(a) The non-disturbing and in-line-with-the-market-expectations QE tapering announced.
(b) Upcoming Italian election in 1H18 which should limit the scope for higher bund yields and thus a higher EUR,” ING argues.
