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Market Analysis

Should Euro Traders Follow Big Bank Forecasts?

April 23, 2019
BY Emma Richards

One year ago, EURUSD was trading on a high of 1.23700, and the eurozone was celebrating the stability of their common currency. Then the Brexit circus came to town and rumors of other countries losing faith in the EU started to circulate. Euro sentiment weakened shortly after, and then a 12-month downtrend started that recently bottomed at 1.12000. Will the euro recover in 2019? FX News may well have the answer to that question, along with an incredible trading insight for all our readers.

So far this year, EURUSD has been a rollercoaster of twice-per-month highs and lows offering superb short-term trading conditions. But these two heavy hitting currencies seem locked in a specific range. Is it time for the euro to bounce back? Should you ‘Buy’ EURUSD?

For the euro to gain dominance, something striking must happen, but there’s nothing on the cards that could fire up a euro breakout. Fortunately, the banks seem to have a solution. If they are right, traders everywhere can expect to see a massive euro rally in the coming months.

Optimistic forecasts from the big banks

Are the big bank forecasts just hot air, or will the euro rise?

Dozens of banks are already promoting the euro, including these heavy hitters:

  • Swiss Bank Corporation has forecasted a EURUSD gain of 0.07000 in the coming months, with high expectations of a rise to 1.20000 by Q4.
  • UBS Group AG are backing the euro with optimistic projections for both Q2 and Q3.
  • Morgan Stanley’s positive forecast for the coming PMI (Purchasing Managers Index) might have already started raising market sentiment.
  • Nordea Bank Abp has also jumped on the euro bandwagon, announcing a euro forecast that specifically mentions a 1.1650 break within the next 3 months.

“At some point, one must put the money where the mouth is!”

Martin Enlund, Chief Analyst at Nordea Bank Abp.

A striking statement from Nordea, but what if all the European banks are actually doing the opposite—putting their mouth where they want the money to go? Are these the first signs of an orchestrated euro rally in the making? If the banks get it right, currency traders will be riding the ‘Buy’ button for the rest of the year with a max leverage setting.

It’s not an uncommon practice for financial powerhouses to influence forex prices using strategic announcements. Hyping a news announcement or financial report is not illegal. It’s also not unfair, even though it can heavily influence or boost prices in a desired direction. Most importantly, you as a forex trader can take advantage of the foresight and ride the influences of a strategic news release.

So will the positive euro forecast stick?

When numerous big-name banks start throwing positive sentiment towards a particular currency, investment firms and hedge fund managers tend to react in favor of the forecast. They can’t all be wrong… right? See for yourself what the financial world is saying and make your own sentiment-based euro forecast.

Just check the most popular financial news sites every day. See which currencies are getting all the “love”, then open your trading platform and check the prices. If the world believes what the big banks in Europe are forecasting, then a EURUSD ‘Buy’ order might end up being the best trade you’ll make this year.

Follow the big bank forecasts and trade euro CFDs

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Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analytics. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis. Risk warning: CFDs are leveraged products. Trading them carries a high level of risk, so it is not appropriate for all investors. The value of investments can both increase and decrease and an investor may lose all their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from or relating to any transactions in CFDs. © 2008—2019, Exness
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