4 Jun 2015
EUR/USD likely to revisit 1.14-1.15 in the near-term – TDS
FXStreet (Barcelona) - According to FX Strategists at TD Securities, EUR/USD sees near-term upside potential for 1.14-1.15, although the long-term trend remains bearish due to the expected Fed rate hike.
Key Quotes
“Draghi’s acceptance of the market volatility is significant in our view and could potentially challenge the EUR parity view. That is, while a lower EUR is necessary to redistribute wealth within the Eurozone, the goal of the ECB is to generate sufficient growth to pull inflation towards target rather than a particular level of the currency.”
“Additionally, the ECB will be nonchalant with EURUSD trading within 1.10-1.20 for as long as they are seeing 2% GDP growth and inflation trending higher.”
“We would argue that the primary trend for the EUR remains lower as the inevitable Fed policy liftoff (still September in our view) occurs, but the thesis of challenging parity may need to be revisited. For now we see solid support for EURUSD above 1.12 and we set 1.14-1.15 as a likely near-term target.”
Key Quotes
“Draghi’s acceptance of the market volatility is significant in our view and could potentially challenge the EUR parity view. That is, while a lower EUR is necessary to redistribute wealth within the Eurozone, the goal of the ECB is to generate sufficient growth to pull inflation towards target rather than a particular level of the currency.”
“Additionally, the ECB will be nonchalant with EURUSD trading within 1.10-1.20 for as long as they are seeing 2% GDP growth and inflation trending higher.”
“We would argue that the primary trend for the EUR remains lower as the inevitable Fed policy liftoff (still September in our view) occurs, but the thesis of challenging parity may need to be revisited. For now we see solid support for EURUSD above 1.12 and we set 1.14-1.15 as a likely near-term target.”