3 Dec 2015
Is the EUR close to the bottom? - BNPP
FXStreet (Delhi) – Research Team at BNP Paribas, thinks that the EURUSD pair will struggle to hold below 1.05, even in the aggressive easing scenario they are forecasting.
Key Quotes
“The ECB is set to deliver significant easing on Thursday, with our economists anticipating a 20bp cut in the deposit rate to - 40bp, a EUR10bn increase in the monthly pace of asset purchases, and an extension of the projected end date of the program by a year to September 2017.”
“This will be on the high end of market expectations and, with short positioning already having been cut back a bit in the squeeze of the past two days, EURUSD should be able to push lower and potentially challenge the year’s low’s at 1.0458 in response.”
“With year-end approaching quickly and considerable event risk relating to US employment data and the Fed meeting later this month, we expect to see good interest to take profit on successful shorts. We maintain our yearend EURUSD target at 1.06, and see the pair reaching 1.04 more gradually in Q1 of next year, en route to parity by Q3.”
Key Quotes
“The ECB is set to deliver significant easing on Thursday, with our economists anticipating a 20bp cut in the deposit rate to - 40bp, a EUR10bn increase in the monthly pace of asset purchases, and an extension of the projected end date of the program by a year to September 2017.”
“This will be on the high end of market expectations and, with short positioning already having been cut back a bit in the squeeze of the past two days, EURUSD should be able to push lower and potentially challenge the year’s low’s at 1.0458 in response.”
“With year-end approaching quickly and considerable event risk relating to US employment data and the Fed meeting later this month, we expect to see good interest to take profit on successful shorts. We maintain our yearend EURUSD target at 1.06, and see the pair reaching 1.04 more gradually in Q1 of next year, en route to parity by Q3.”