EUR/USD had a positive week, gaining some ground within the range. Can it extend its gains further? Here are two opinions: one for 2017 and the other for 2018:
Here is their view, courtesy of eFXnews:
EUR/USD: Price-Action Into Year-End; 1.19-1.20 Or Bust – ANB AMRO
ABN AMRO FX Strategy Research discusses EU/USD outlook and price action, outlining 4 reasons behind the single currency’s strength this week
First, investors still strongly believe in a stronger euro.
Second, the positive impact of the US tax plan on the dollar seems to have faded as there is uncertainty when there will be a vote and when the effect on the economy will be felt.
Third, a rate increase by the Fed in December is fully priced in.
Finally, the deterioration in investor sentiment that we experienced this week has weighed on the US dollar, ABN AMRO argues.
We expect that EUR/USD will rise towards 1.19-1.20 in the coming weeks.
If the rally runs out of steam before or around that level, it is likely that investors will take profit and close their long euro positions before the end of the year. This could result in a substantial weakening of EUR/USD in the last days and weeks of the year,” ABN AMRO projects.
EUR/USD: ‘Busy’ Building The Foundation For Another 10% Higher – SocGen
Societe Generale Cross Asset Strategy Research discusses EUR/USD outlook, arguing that the pair is likely to consolidate into the year end as it prepares for another big move higher next year.
The euro and yen are both undervalued and have scope to rise significantly. In the very short term, the euro has over-reacted in anticipation of early monetary policy normalisation, but it’s got a good way further to go over time.
….The rest of 2017 may be more about a tired risk rally and the baggage of positions, but the euro is busily building the foundations of another 10% of upside against the dollar, SocGen argues.
