FXStreet (Edinburgh) – Senior Currency Strategist at Rabobank Jane Foley sees occasional bullish attempts in spot as selling opportunities.
Key Quotes
“The Eurozone may have a large current account surplus, but the ECB QE plan should ensure that rates remain relatively low medium-term”.
“This argument has formed the basis of the EUR/USD downtrend between July 2014 and April 2015. It also explains why we expect that EUR/USD can push moderately lower on a 12 mth view”.
“That said, the market is already very short EUR and long USD. This positioning coupled with the fact that the market in recent months has pushed back its expectations for the timing of the first rate cut may limit the enthusiasm for even greater USD longs and lend EUR/USD decent support”.
“While a near-term deal for Greece may send EUR/USD higher in a knee jerk reaction, it could also trigger renewed confidence in risky EM assets and ironically encourage flows back out of the EUR. Consequently we would view such a squeeze higher in the EUR as a selling opportunity”.
(Market News Provided by FXstreet)