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EUR/USD made a clear break higher. What’s next? The team at ABN-AMRO sees further room to the upside.

Here is their view, courtesy of eFXnews:

ABN AMRO FX Strategy Research makes the case for further EUR/USD upside this year on the ground of 5 key  reasons:

ABN argues that:

1-  “a 25bp Fed rate hike in June is fully discounted and a 25bp rate hike in September is for around 50% priced in.

2-The market will continue to focus on ECB tapering and this should support the euro going forward

3-The negative headlines about the Trump administration will probably remain.

4-  More squaring of speculative net-long USD positions as these positions will likely be cut towards neutral which could mean another 4% decline in the dollar versus a basket of currencies.

5-  The technical picture has turned negative a the US dollar index has broken below the 200-day moving average and EUR/USD above this technical level.” ABN argues.

In line with this view,  ABN now targets further EUR/USD upside towards 1.15 this year and 1.20 next year and expects speculative investors will look for opportunities to sell the dollar and buy the euro.

EUR/USD is trading circa 1.1160 as of writing.

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