EUR/USD: Broad M-Term Recovery Has More Legs; Where To Target? – CIBC

EUR/USD had already surpassed the 1.1700 level but retreated a bit. What’s next?

Here is their view, courtesy of eFXdata:

CIBC Research discusses EUR/USD outlook and adopts a bullish bias over the medium-to-long term.

Looking beyond interest-sensitive capital flows, remember that the euro is also buttressed by an attractive Eurozone current account surplus that is expected to remain well above 3% of GDP.

A combination of ongoing capital flows, reduced political risk dynamics, still above-trend growth and the potential for earlier than expected central bank action in 2019 point towards medium run EUR gains.

Our end of 2019 target of 1.28 may seem like a reach, but it’s actually only a bit above the average level seen since the global financial crisis,” CIBC argues.

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