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The Chart Of The Week: Euro In Freefall

Published 08/31/2014, 12:27 AM
Updated 07/09/2023, 06:31 AM

The euro is in absolute free fall:

XEU Daily Chart

EUR/USD is pretty oversold in the short term, however, there can be no doubt that this currency pair is in a very strong downtrend and likely has much further to fall. From the Goldman Sachs currency team:

“We also believe that the dynamics of the Euro have fundamentally changed… As far as ECB policy goes, we think there is – counter to market consensus – plenty of room for President Draghi to ‘talk’ the currency lower, which he notably started to do in the August press conference when he said that “fundamentals for a weaker exchange rate are today much better than they were two or three months ago”. Reinforcing his comment, we estimate that the fair value for EUR/$ is around 1.19. Therefore, even with the depreciation of the Euro in recent months, it is still expensive,”

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