RBS: thoughs about EUR/USD
Analysts at RBS compare the current situation in the euro are with what we’ve seen in Japan before Abe became the Prime Minister: the central bank in the face of deflation pressure and a large current account surplus that leads to a strong currency. In their view, “without a sovereign crisis against ongoing extreme policy easing in the US, EUR is likely to grind higher”.
The specialists view the current decline in EUR/USD as corrective. This correction happens as the market’s been very long on euro and traders are worrying about potential earlier than expected Fed’s policy tightening, so long positions got squeezed. Yet, the general trend remains to the upside.