EUR/USD Set To Rally In 2016, Now Is The Time


EUR/USD is certainly already on the move, thanks to the big dollar dive. To be fair, this assessment from Danske was released before the move. Here is their reasoning:

Here is their view, courtesy of eFXnews:

One argument for a lower EUR/USD:

– Relative rates: still in favour of USD…

Relaitve rates a USD positive

…but several arguments for a higher EUR/USD:

Valuation: EUR/USD is substantially undervalued

EURUSD is substantially undervalued

External balances: The EU/US CA differential is at its widest level since 2004-06

Cyclicals: the Eurozone’s business cycle looks stronger than the US cycle

Positioning: speculators are stretched short EUR/USD > impact of relative rates fading

Positioning speculators streched short EURUSD

Terms of trade: ’lower oil for longer’ has become a EUR positive

Hedging flows: commercials FX hedging of EUR set to fall, which should support EUR/USD

EURUSD forecast 3 6 12 months

Now is the time to prepare for a higher EUR/USD:

We recommend investors have long EUR exposure. We recommended to buy EUR/USD 12M bullish seagull.

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.

Get the 5 most predictable currency pairs

About Author

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.

Comments are closed.