EUR/USD to bottom at 1.12 next year - Rabobank
|According to analysts from Rabobank, see the EUR/USD pair moving to the downside on the back of US dollar strength.
Key Quotes:
“In the space of just one month, EUR/USD has traded as high at 1.1757 (on September 27) and as low at 1.1432 (October 9). This volatility has sent misleading signals about whether EUR/USD is ready to bounce higher from the downtrend that has dominated a large part of this year or whether what we have witnessed in recent weeks is a series of short-term corrections within a long term downtrend.”
“We remain of the view that USD strength has further to run and continue to forecast that EUR/USD will bottom in the 1.12 area in the middle of next year. By H2 2019, EUR/USD is likely to be traded against the backdrop of a fresh set of concerns which could include slower US growth in addition to an uneasy political backdrop in the Eurozone.”
“We are of the view that by the second half of next year the market will be looking at a less attractive backdrop for the USD. By then slowing US growth, plateauing Fed interest rates and potentially a greater focus on the budget deficit could be clouding the outlook for the USD. Our central view is that EUR/USD could see a bottom around the middle of next year. That said, EUR/USD could struggle to push higher dependent on the political and economic backdrop in the Eurozone.”
“With the populist mood in Europe possibly set to make a mark on the outcome of the European parliamentary elections next spring, the themes of prudence and reform could take less prominence in the Eurozone going forward. This would impact the direction of the EUR and suggest the room for a recovery in the EUR in H2 2019 could be limited.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.