Is EUR/USD heading to 1.27? Two models point that way

EUR/USD topped 1.25 in a turbulent week before falling back to the 1.24 handle. Mnuchin, Draghi, and Trump all moved the world’s most popular currency pair. What do the technical levels say? Here are two opinions:

Here is their view, courtesy of eFXnews:

EUR/USD: Path Of Least Resistance Remains A Higher EUR; S/T Models Point To 1.27 – TD

TD Research discusses EUR/USD outlook, and notes that the EUR continues to defy gravity, marking a new multi-year high following yesterday’s ECB meeting.

“It’s clear from the price action that the market knows the ECB is running out options to sound “dovish.”…we believe that the path of least resistance is for a higher EUR, as the ECB is running out of ammo to contain the moves.

EZ FCU remains extremely accommodative and our longer-term fair value models show the EUR is still a bit cheap to structural fair value while our cyclical (short-term) one doesn’t see any stress until 1.27,” TD argues.

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EUR/USD: Bullish Bias Targeting 1.27; USD/JPY: Bearish Bias Targeting 107.50 – BTMU

BTMU Research discusses EUR/USD and USD/JPY outlook in light of the recent broad-based USD weakness and turns back to a bullish bias on EUR/USD targeting a move towards 1.27, while sees the downside limited to 1.2200, while stays bearish on USD/JPY targeting a move towards 107.50, while sees the downside limited to 110.00. 

“USD weakening has been the main driver of major currency movements this week. USD/JPY weakening momentum is likely to persist for the time being,” BTMU argues.

“At best the ECB’s still dovish policy stance could act as a temporary dampener on euro strength although is unlikely to reverse upward momentum on its own. EUR/USD is likely to encounter more resistance at levels above 1.25000 in the near-term,” BTMU adds.

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