“2Q should also be the period when China re-opening trends gain a further leg higher. More precisely, the strategists believe that Q223 could especially prove to be strong for EUR/USD on expectations that the U.S. At the current 1.08 level, we estimate that EUR/USD is approximately 7-8% undervalued in real terms,” they wrote in a blog post. ING’s mid-term fair value sees EUR/USD at around 1.15. They see a “more benign environment” that could pave the way for the pair to trade “substantially higher” in 20. Possibly a correction to 1.05 before any further strength can occur such as to each markets 200wk SMA’s in the 1.12s and 97s.” EUR/USD undervalued at current levels - INGĮUR/USD should continue moving higher in 2023, according to ING FX strategists. “By reaching the 1.09s euro will be backtesting this line with potential for it to be again serve as a pivot point for a correction lower. They also highlighted 1.09 as an “inflection point” for EUR/USD. Following the recent USD selling, we think the latest FX positioning would more easily support a near-term EURUSD correction lower, as per our forecast,” the strategists added. Both Hedge Funds and Real Money are long EUR, but their flows have recently diverged. “EUR positioning is long, the longest in G10, and longer than a year ago, but we do not find it stretched. EUR/USD not “excessively” undervalued, the BofA FX strategists see EUR start moving towards its equilibrium this year. While the recent run-up in EUR/USD price has made the picture more balanced i.e. Outperformers include those that will likely be sensitive to a recovery in the Chinese economy, including those currencies which were underperformers in 2022 such as the Chilean peso," strategists wrote in a note, according to Reuters.įrom the valuation standpoint, the EUR is “undervalued,” the strategists added. "Within emerging markets, we see an approximately 5% total return until the end of the year. Morgan Stanley's new forecast sees EUR/USD at 1.15 by year-end, a substantial revision to their previous forecast of 1.08.Įlsewhere, Morgan Stanley FX strategists also expect the British pound to record negative returns for 2023, citing domestic growth challenges. "Global growth is showing signs of buoyancy, macro and inflation uncertainty are waning and the USD is rapidly losing its carry advantage," FX strategists wrote in a note. They now see the dollar index finishing the year at 98 with the greenback especially struggling against the euro. Morgan Stanley FX strategists slashed their 2023 year-end forecast for the USD. Morgan Stanley raises EUR/USD 2023 forecast EUR/USD opened in 2022 just below the 1.14 handle. Given how strong it acted as support on the way down, analysts expect this area to pose strong resistance to EUR/USD bulls as they attempt to recoup all losses from 2022. The problem for EUR/USD bulls is that the zone around $1.09 offers a very strong resistance, in the context of an ascending trend line connecting two major lows (January 2017 and March 2020). The strong end to 2022 has also paved the way for outperformance in the first two weeks of this year. Increasing bets that the Fed will slow down the pace of rate hikes has yielded a strong rebound with EUR/USD price rallying over 14% since September. Here we look at the EUR/USD forecast for 2023, including comments from highly-rated FX strategists. EUR/USD has hit a major resistance line in recent days, signaling a pullback may be occurring soon.Īs of January 16, 09:05 ET (14:05) GMT, EUR/USD trades at 1.0816. The major hit a 20-year low in September 2022 when it traded in the low 0.95s. EUR/USD price has had a strong couple of months.
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