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EUR/USD looks oversold medium to long term - Lloyds Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Analysts from Lloyds Bank, expect the EUR/USD pair to trade at 1.090 by year-end and at 1.17 by the end of 2017.

    Key Quotes:

    “Some positive risk sentiment has returned to the markets over the past couple of weeks, which alongside some bringing forward of US rate expectations has given the US dollar renewed impetus. Meanwhile, a return to negative territory in euro area inflation and the consequent rise in expectations for further policy easing from the ECB has weighed on the euro.”

    “Near term, we expect EUR/USD to retain its downward bias, particularly if the ECB fails to disappoint market expectations. However, over the medium to longer term, we believe the euro looks oversold.”

    “Fundamental estimates of fair value for EUR/USD centre around 1.20. However, clear signs of a recovery in ‘core’ euro area inflation, firmer signs of economic recovery and an associated narrowing in US and euro area rate spreads are likely to be required to push the euro meaningfully higher. We target 1.09 by end 2016 and 1.17 by the end of 2017.”
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