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EUR: 3 Reasons Why We Have Turned Negative On EUR/USD For The Remaining Of The Year? – BofA

What is the outlook for EUR/USD over the coming months?

Here is their view, courtesy of eFXdata:

Bank of America Global Research discusses its bearish EUR/USD case over the coming months.

“We recently changed our EURUSD forecast for this year from 1.20-1.25 to 1.15-1.20 (from 1.25 to 1.15 year-end). Though our 1Q forecast of 1.20 is turning to be right,  we have turned negative on EURUSD for the remaining of the year following three new developments:  the mixed Fed communication and hints for QE tapering; the massive US fiscal stimulus; and a slow start of European vaccination,” BofA notes.

“The market remains long EUR, which is a particularly stretched position for real money. Our baseline makes no specific assumption about the risk outlook, but our global investment strategy team is concerned about stretched valuations and positioning, which would also be negative for EURUSD,” BofA adds.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.