EUR/USD continues to lose ground and has fallen below the 1.08 level. What is the outlook for the pair in the coming months?
Here is their view, courtesy of eFXdata:
Bank of America Global Research discusses EUR/USD outlook and outlines 6 key reasons for staying structurally bearish on the pair over the coming months targeting a move towards 1.02.
“Though EURUSD is undervalued by about 10%, according to our estimates, we see it weakening further in the rest of the year. We forecast EURUSD at 1.02-1.05, with risks to the downside.
We expect EURUSD to weaken in the months ahead, given: a weaker global outlook, a more severe Eurozone recession, a weaker Eurozone macro policy response, periphery sovereign risks, low oil prices, and a long EUR market position,” BofA argues.
We would be wrong and EURUSD would strengthen if a cure or vaccine for COVID-19 were to be found soon, as the global outlook would improve substantially, or if the Europeans were to mutualize a substantial part of the increase in the government debt–through a Eurobond/Corona bond–but this seems unlikely,” BofA adds.
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