One year outlook for EUR
Comment: Currency moves over the next year are likely to be as big as they have been so far this year. Against the US dollar expect the Euro to fluctuate by five to ten cents monthly, causing chart levels not to hold neatly as well as ‘extensions’ and ‘spikes’. With a little luck the 1.1700 area will hold in Q4 2005, causing a squeeze back up to 1.2500 by year-end. Then more consolidation between 1.2000 and 1.3000 in H1 2006. By the end of Q3 2006 the Euro should be trading closer to 1.3500.The longer we hold below 1.2500, the greater the chance of a deeper pullback to 1.1500 and maybe 1.1000. From there we would favour a very steady rally back up to 1.3000.
