The common currency lost a lot of ground to the greenback in recent months, in a gradual yet consistent grind lower. Can it extend its falls and hit even lower ground. The team at SocGen discusses the potential downside and what does keep the euro bid: Here is their view, courtesy of eFXnews: EUR/USD is on its way to below 1.20 for the first time in a decade, projects SocGen. “Transatlantic monetary policy divergence is making its presence felt, with negative ECB deposit rates particularly potent when it comes to driving money out of the euro. A weaker currency will also be the main impact of ECB sovereign QE in Q1,” SocGen adds. Specifically, SocGen expect the EUR/USD to fall to 1.14 in 2015. So why not to parity? Will it collapse after? “…Arguably, the Rates/FX link has been re-established after a troubling break at the turn of 2013-2014. EUR/USD is even overshooting to the downside and that is how it should be now that the ECB plans a bolder expansion of its balance sheet,” SocGen adds. Nevertheless SocGen still expects EUR/USD downside to be limited by three factors: 1- Large currency moves would make the Fed more cautious. That should be a selfcorrecting mechanism. 2- Positioning is already extreme, which should limit EUR downside. 3- The euro’s basic balance (current account, portfolio flows, FDI) has reached new record highs, at some €370bn over the past 12 months…Historically, that has been a strong driver of the euro . This no longer holds true but can’t be ignored entirely. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. Yohay Elam Yohay Elam 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 a 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. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next Chinese Collateral Crunch Craters Equities Scott Smith 8 years The common currency lost a lot of ground to the greenback in recent months, in a gradual yet consistent grind lower. Can it extend its falls and hit even lower ground. The team at SocGen discusses the potential downside and what does keep the euro bid: Here is their view, courtesy of eFXnews: EUR/USD is on its way to below 1.20 for the first time in a decade, projects SocGen. "Transatlantic monetary policy divergence is making its presence felt, with negative ECB deposit rates particularly potent when it comes to driving money out of the euro. A weaker currency will… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.