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In this publication: We lower our stop loss in EUR/USD from 1.09 to 1.0675, which is roughly the break-even level of this recommendation. We expect EUR/USD to break parity and to reach 0.95 over the next 6 months.161219-Change-stop-loss-EURUSD.pdf (176 KB)
Change in stop loss EUR/USD
The more hawkish than expected FOMC communication last week has resulted in a restart of the rally in the US dollar. EUR/USD has broken below last year’s lows and made a new 14-year low of 1.0367 on 15 December 2016. Since then currency markets have calmed down somewhat.
On 2 December 2016, we recommended to open short euro versus US dollar. This recommendation has performed well. At the time of writing the total return on this recommendation is 1.9%. Going forward we expect the EUR to weaken further versus the US dollar driven by eurozone political uncertainty and monetary policy divergence across the Atlantic. We expect EUR/USD to break below parity and to reach 0.95 over the next 6 months. However, we also have as a policy that we should not loose on a recommendation if there has been a solid profit. Therefore, we move down our stop loss from 1.09 to 1.0675, which is just above previous intraday peaks and roughly at the break-even level.