The Chart Of The Week: Euro In Freefall
Tommy Humphreys | Aug 31, 2014 12:27AM ET
The euro is in absolute free fall:
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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