Fundamental Forecast for EUR/USD: Bearish
- The Euro[1] fell sharply across the board after ECB President Draghi’s press conference on Thursday, as it was revealed that while the QE program will end in December, that doesn’t mean other programs couldn’t be started up (i.e. TLTROs).
- Amid volatility in global bond and equity markets, the safe haven crosses (EUR/CHF, EUR/JPY[2], and EUR/USD) were three of the four biggest losers last week.
- The IG Client Sentiment Index[3]has quickly flipped to bearish as retail traders buy the Euro dip.
See our long-term forecasts for the Euro and other major currencies with the DailyFX Trading Guides[4].
The Euro was the third worst performing major currency last week, losing ground against all but for the British Pound[5] (EUR/GBP +0.44%) and the New Zealand Dollar[6] (EUR/NZD +0.94%). Amid volatility in global bond and equity markets, the safe haven crosses (EUR/CHF -1.55%, EUR/JPY -0.87%, and EUR/USD[7] -0.97%) were three of the four biggest losers last week. But issues outside of the Eurozone aside, the European Central Bank gave traders reasons anew to sell the Euro.
The Euro took a dive during ECB President Draghi's press conference after it was confirmed that the ECB will end its QE program in December 2018 and it was also revealed that the ECB could consider other tools as it has in the past (i.e. TLTROs) if it were required to support Italy. Even if President Draghi continues to speak confidently about the inflation outlook, the fact of the matter is that if the ECB is willing
