EUR/USD is looking for a new move on lower ground. Can it recover? It may not be that easy.
Here is their view, courtesy of eFXdata:
Bank of America Merrill Lynch Research discusses EUR/USD outlook and maintains a sell-on-rallies strategy.
“We remain bearish EURUSD and would sell any rallies. Looking ahead, we expect relative data, trade policy and developments in Italy to be the main EURUSD drivers.
The ECB has effectively took itself out until at least September 2019–with the exception of the discussion about Draghi‘s replacement, which is likely to intensify by the end of this year.
We expect the US data to remain strong, as the impact of the fiscal stimulus continues. We expect trade protection to be negative for the EUR, as the Eurozone economy is highly dependent on exports. And we see Italy risks during the budget discussions this fall, as the new government in Rome is planning a major fiscal expansion,” BofAML argues.
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