Deutsche recommends staying long EUR/USD in Q4 2012

Deutsche has been one of the big banks that have stayed almost uniformly bullish for the EUR/USD in the last couple of months and as the biggest player in the FX market, they are well worth listening to.

They sent out a note to their customers a little earlier recommending that, based on ECB and Fed policy, the natural play is to stay long EUR/USD for this quarter.

  • They expect some upside growth surprises in the EU this quarter:
  • Any aggressive QE programs from the ECB, similar to the Fed, are highly unlikely given the current structures within the EU:
  • Any chance of cutting deposit rates to negative is also considered highly unlikely:

That of course doesn’t discount any nasty sell-offs on bad-news headlines but I get their drift.

  1. Agree that the euro has some upside, my personal target is 1.3480. But I think this is more of the second part of the quarter imho, once earnings season, US elections and spanish bailout are behind.

  2. These fundamental analyst guys are always very macro which doesn’t always help traders like us when we are 200 pips out of the money 🙂 Its good to understand their arguments and then store it away 🙂

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