The European Union’s recovery fund marks a strengthening in the fundamentals of the euro notes Rabobank analysts. They forecast EUR/USD trading in the 1.15/1.16 area on a one and three month view from a previous forecast of 1.13.
Key Quotes:
“We have revised our EUR/USD forecasts higher and now see EUR/USD trading in the 1.15/1.16 area on a 1 and 3-month view. On the anticipation that risk appetite will be reeled in in the coming months and that the USD will remain a primary safe haven, we see a dip lower towards the 1.12 area on a 6 month view.”
“EUR/USD faces a critical technical barrier – the long-term downside trendline at 1.1648. A break higher (ideally a weekly or even a monthly close above this level) would be a major bullish signal that would support the view that EUR/USD is at the beginning of reversing the downside trend from the 2008 high. The Fibonacci 38.2% retracement at 1.2510 would be the next target for the bulls.”
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