In March this year, we have called on our readers to go short in the euro, at the then current rate of 1.218 against the USD with a target of 1.17 area. https://www.econotimes.com/FxWirePro-Call-Review-Euro-short-term-outlook-revised-from-bullish-to-bearish-targeting-117-1178120 and in follow up reviews, here https://www.econotimes.com/FxWirePro-Call-Review-Maintain-short-positions-in-EUR-USD-ahead-of-ECB-1275745 and here, https://www.econotimes.com/FxWirePro-Call-Review-Maintain-short-positions-in-EUR-USD-target-revised-lower-1315385 we have extended the target to 1.145 area.
Citing the following fundamentals,
- U.S. President Donald Trump’s trade challenge.
- Additional demand for payments to NATO by the United States.
- Italy’s clash with bureaucrats in Brussels over immigration and austerity after new populist leaders came to power in Italy.
- Angela Merkel’s struggling attempt to maintain chancellorship amid a threat by coalition partner to quit or impose harsh immigration policy if she fails to find a common resolution to the problem.
- Uncertainties surrounding Brexit.
- Growth is slowing down, along with PMI numbers.
- Both consumers and business confidence are crashing.
In our next review, we extended our bearish target for the euro to 1.095 area in June, https://www.econotimes.com/FxWirePro-Call-Review-Euro-downside-target-revised-to-1095-against-USD-1391422
Since June, the single currency has declined further to as low as 1.13 area before the current bounce back triggered by President Trump’s criticism of the U.S. Federal Reserve and its policy to hike rates. We would like to urge our readers to maintain short positions on the euro against the USD and use this bounce back as an opportunity to enter fresh short positions. We would recommend selling as close to 1.175 area. Any fresh position should maintain the stop loss around 1.19 area to target 1.095 area.
