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Goldman Sachs lowers its Euro-Dollar forecasts

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Back in January 2015, we informed you in exclusivity that Goldman Sachs forecasted EURUSD parity by 2017. This forecast was motivated by Goldman’s belief that a growth and competitiveness crisis was likely to continue in Europe, further weakening the Union currency. While the economic numbers stayed around their January levels in Europe, many external shocks have penalized the Eurozone currency. During the same period, the same trends tended to reinforce the US dollar (Fed rate hike, ECB stimulus, oil crash, better US economy…).

goldman-sachs-lower-euro-dollar

Last week, Goldman Sachs reacted to the last ECB meeting and decided to revise down its expectations for the EURUSD exchange rate. The US investment bank now expects the forex pair to reach 0.95 within 12 month. That would drive one the most exchanged currency pair below parity.

Goldman Sachs sees the EURUSD at 0.95

In its report, Goldman provided further details about its interpretation of the last ECB’s press conference held by Mario Draghi last week. According to the investment bank : « the opening statement adopted an easing bias for the deposit rate ». It means that Goldman Sachs expects the ECB to cut its deposit rate again if necessary hence further depreciating the Euro currency as investor prefer to invest in higher rate currencies. ECB’s president Mario Draghi also flagged that the March meeting would “review and reconsider” the monetary stance, meaning that the Central Bank could further increase its stimulus program and depreciate the euro versus most major currencies.

How to build a binary option strategy on this?

The above is a long-term forecast. Many things can happen between now and the beginning of 2017. The recent financial market shocks and oil price drops have raised the likelihood of the US Central Bank delaying its rate hike process. Any sign of doubt from the Fed officials could be interpreted as a dovish move and send the EURUSD back on the upside. Nevertheless, on the long term, the downside trend is likely to persist and the long awaited parity is likely to materialize.

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One good thing is that such statement is likely to bring some volatility to the forex market, which is always good for binary option traders. This forecast is also likely to materialize in the form of a downtrend that you can use to build trend line trading strategies with binary options. You can also use this forecast as a catalyst for buying long-term binary options. Anyoption and Interactive Option are popular for offering long-term maturities on binary options that you can use to build strategies based on long-term forecasts.

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Forex is the most popular market for binary option traders. All our recommended brokers propose all types of binary options on EURUSD with a large range of maturity. Don’t hesitate to have a look at our detailed review of, 24Option, AnyOption, IG binary and TopOption for more information about their specific offers.

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