Forex Flash: EUR/USD could fall markedly to 1.30 in 3-6 months – Rabobank

The euro continues to push higher on Friday, piercing for a few moments another key resistance at 1.3700, although later retracing part of those gains. In the opinion of Senior FX Strategist Jane Foley at Rabobank, since the 2012 lows around 1.2040 posted in July, the euro was constantly pushed higher either by the ECB and Draghi’s optimistic comments, further QE by the Fed, cheap liquidity, all echoing on a better investor’s confidence.

“However, we have been arguing for a while that there is a disconnect between the strength of investor confidence and the vulnerability of the global economic climate… As is stands both the Eurozone and Japan are mired in recession and the Eurozone may not grow at all this year”, the analyst added.

“Although it is currently difficult to specify both the trigger and the exact timing for a correction lower in EUR/USD, we anticipate on a 3-6 mth view EUR/USD could fall sharply back towards the 1.30 area before resuming the current uptrend”, Foley concluded.