EUR/USD, USD/JPY: ‘Conservative’ Targets At 1.30 & 100 As USD Regime Change Underway – ING

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Both the euro and the yen had roller-coaster weeks against the US dollar amid rising market volatility. What’s next?

Here is their view, courtesy of eFXnews:

ING Research discusses the USD outlook by looking at the divergence in US yields and the USD performance, and notes the following key points.

” i) this year’s rise in Treasury yields look to have been driven more by the term premium and embodying US fiscal risks, thus a weaker dollar is the cost of financing larger deficits,

ii) the recent sharp adjustment in correlations happens rarely and on average has seen USD/JPY decline 6% over a subsequent 3 month period,” ING notes.

We have medium term fair value calculations for EUR/USD and USD/JPY at 1.22 and 104 respectively. However, we believe the dollar risk premium can see the dollar extend into undervalued territory and currently have conservative year-end targets for the two pairs at 1.30 and 100,” ING argues. 

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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