The euro continues losing ground against the greenback but it could change relatively quickly. Here is their view, courtesy of eFXnews: Four arguments for a lower EUR/USD: “¢ Relative rates: bearish for EUR/USD as the Fed is slightly underpriced for 2018 “¢ European politics: EUR/USD negative but do not overestimate the impact “¢ Potential border tax adjustments: bearish EUR/USD but the size of the impact is uncertain “¢ Potential Homeland Investment Act (HIA) 2: bearish EUR/USD but impact likely less than in 2005 Six arguments for a higher EUR/USD: “¢ Valuation: EUR/USD is substantially undervalued “¢ External balances: the EU/US CA differential is at the widest level on record “¢ US politics: Trump is not Reagan “¢ Eurozone inflation: ECB tolerance for EUR appreciation should rise as inflation has picked up “¢ US currency policy: the Trump administration appears more concerned about the USD than recent administrations “¢ US money supply: draw on USD cash buffer and US debt ceiling could support EUR/USD 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. EUR/USD outlook: lower short term and higher medium to long term Short term: moderately lower (1M forecast: 1.04, 3M: 1.05): We maintain our call that EUR/USD should move lower on a 1-3M horizon, supported by relative rates and our expectations that the Trump administration is likely to announce details in coming months about corporate tax reforms, border tax adjustments and HIA2. Moreover, we see European politics as a modest EUR negative in comings months and short positioning in EUR/USD is no longer in stretched territory, which should increase the sensitivity to relative rates. We expect that most of the USD positive factors will be priced in over coming months. Medium- to long-term (6M forecast: 1.08, 12M: 1.12): In the medium to long term, we are EUR/USD bullish on valuation and the record-high EU-US current account differential, which should drive currency performance over the medium to long term. In addition, we believe that a substantially larger US budget deficit will be negative over time for the USD as US real interest rates will fall. Some of the factors supporting a lower EUR/USD can also be seen as ‘wild cards’ , as it is not clear if and how fast the new US administration will implement a HIA2 or a new corporate tax regime with border adjustments. Even if implemented, it is not clear that the policies would be a sizable USD positive in 2017. Furthermore, the impact of looming elections in Europe should be short-lived in our base case, where no major eurozone countries leave the euro. Hence, European politics should not impede a rise in EUR/USD due to fundamentals. Hence, we still project EUR/USD to rebound on a 3-12M horizon, as we see stronger arguments in favour of a higher EUR/USD in the medium to long term. 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 Daily Look share Read Next USD: Fade The Trump Risk Premium; Buy USD – BofA Merrill Yohay Elam 5 years The euro continues losing ground against the greenback but it could change relatively quickly. Here is their view, courtesy of eFXnews: Four arguments for a lower EUR/USD: "¢ Relative rates: bearish for EUR/USD as the Fed is slightly underpriced for 2018 "¢ European politics: EUR/USD negative but do not overestimate the impact "¢ Potential border tax adjustments: bearish EUR/USD but the size of the impact is uncertain "¢ Potential Homeland Investment Act (HIA) 2: bearish EUR/USD but impact likely less than in 2005 Six arguments for a higher EUR/USD: "¢ Valuation: EUR/USD is substantially undervalued "¢ External balances: the EU/US… 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.