Recently, one of the twitterati pointed out an article on EURUSD parity forecast by Goldman Sachs and how I wrote about the same a year ago in October, 2013. I just told him - I Forecast First, Goldman Sachs & Others Later
Though the forecast didn’t come as a surprise to me, I was just wondering how did I miss it! But I was surprised to see how late Goldman Sachs & others were in forecasting about Euro’s parity with the dollar.
It is obvious that strong dollar means strong US and Federal Reserve (FED) would do everything possible to make US strong. Quantitative Easing (QE) was never meant to be as QE Infinity as it has serious implications in long run. Sooner or later FED had to interfere by raising rates, which they now have at least started discussing and targeting. On the other hand, ECB had to print and will print more money in the future as suggested by Draghi recently. In fact, he lowered the inflation forecast for Euro zone. Also, big Euro members are at a risk of recession. Basically Euro was always doomed. So, I still maintain my view on sub 1-level (parity level) for EURUSD till FED goofs up or ECB surprises us!
On 1st October, 2014, in the same context, I talked about the weakness of Euro and how magnetic levels of EURUSD & Dollar Index will be achieved (see how easy it is to tweet a view than to post it on your blog in real time)
— TradingWala (@TradingWala) October 1, 2014
Later on on 3rd October, 2014, those magnetic levels were achieved.
— TradingWala (@TradingWala) October 3, 2014
The larger point I want to put across is that EURUSD will not reach parity level in one go or in one line. There will be correction and relief rallies based on speculations and manipulations.
Now it’s your turn…..
Feel free to share your experience and thoughts in the comments area.
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