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EUR Top: Goldman Revises EURUSD Target From 1.38 To 1.55

Tyler Durden's picture





 

Goldman's FX team, which is by far the best contrary indicator in FX trends has just issued its revised currency outlook, which now sees the 12 month EURUSD target up from 1.38 to 1.55. Which means the pair is about to plunge. From Stolper: We are revising the majority of our FX forecasts to reflect broad Dollar depreciation. We have been emphasising for some time that structural US imbalances are the main reason for USD weakness and this remains our key theme. In the near term, a number of factors could still provide a boost for the Dollar, but these no longer form the base case for our 3-month forecasts. Instead, we expect the USD TWI to decline gradually from current levels, by about 4.7%, over the next 12 months and to get quite close to historical lows. Importantly, with USD weakness shared globally, the trade-weighted impact for other currencies would likely be relatively muted. Most other countries would experience relatively little appreciation. For example, the EUR TWI would only appreciate by about 3.9% from current levels, although we project EUR/$ at 1.55 in 12 months. Asia will play an important role and we now expect trade-weighted appreciation in key countries, such as China and Korea." The simple take home: buy the dollar.

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Wed, 10/06/2010 - 09:03 | Link to Comment Hdawg
Hdawg's picture

Sell EURUSD!!

No QE2 announcement on November 3rd, Could it be the call for austerity?

Just doing God's (cough Rothschild's) work

Wed, 10/06/2010 - 09:01 | Link to Comment Commander Cody
Commander Cody's picture

I gotta go with GS on this one.  The Fedster is determined to win the currency debasement race.  Now, if only currency debasement were still punishable by death, then we'd have a chance.

Wed, 10/06/2010 - 09:11 | Link to Comment Hdawg
Hdawg's picture

Damned if they do damned if they don't.  The whole world is front running the Fed on the November 3 meeting...if there is no massive QE2 announcement then we'll have a violent contraction on the USD and finish the game there and then.

QE2 Massive buys about 3-6 months but when futures price become Walmart prices it's a violent game over...this process is already on schedule...

http://inflation.us/artificialeconomy.html

 

Wed, 10/06/2010 - 09:02 | Link to Comment Dr. Engali
Dr. Engali's picture

Where were they recommending buying the dollar last month?

Wed, 10/06/2010 - 09:30 | Link to Comment -1Delta
-1Delta's picture

they said to short the Euro at 119... when we had record shorts... we all know what buy implies... get long the USD!

Wed, 10/06/2010 - 09:45 | Link to Comment Dr. Engali
Dr. Engali's picture

Sounds like easy money. Even though money is not what it was worth yesterday.

Wed, 10/06/2010 - 11:56 | Link to Comment ZeroPower
ZeroPower's picture

Ya, such a horrible call. It was at its lowest point in years with record short interest in EUR, and out comes their report 'we expect 1.15 in 3mo and 1.10 l-t target, due to uncertainty in EU.'

Um...whats so certain about EU now??

Wed, 10/06/2010 - 09:03 | Link to Comment Bankster T Cubed
Bankster T Cubed's picture

thanks, been waiting for them to do this.  Now I sell EUR.

GFS = worst people on the planet

Wed, 10/06/2010 - 09:04 | Link to Comment mrgneiss
mrgneiss's picture

Well.......they have to be right one of these times, a broken clock is right twice a day..........

Wed, 10/06/2010 - 09:05 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

And if you cross the international date line, maybe more than twice in a day.

Wed, 10/06/2010 - 09:59 | Link to Comment Oso
Oso's picture

Haha!! amazing.

Wed, 10/06/2010 - 10:20 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

OK, it appears that the junkers have officially crossed over into the twilight zone. So sad really.

Wed, 10/06/2010 - 09:55 | Link to Comment fuu
fuu's picture

I think Zeno's paradox would imply that the broken clock is never right.

Wed, 10/06/2010 - 09:04 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Goldman's FX team, which is by far the best contrary indicator in FX trends

It really does appear that the life boat masters on the Titanic are exhorting the panicked crowd to first rush to the starboard side boats, then to the port side boats while the upper class are lowering away to safety. 

Wed, 10/06/2010 - 09:07 | Link to Comment themosmitsos
themosmitsos's picture

Time to sell it ...

Wed, 10/06/2010 - 09:10 | Link to Comment buzzsaw99
buzzsaw99's picture

time to sell euro

Wed, 10/06/2010 - 09:15 | Link to Comment SheepDog-One
SheepDog-One's picture

'Asia played a role'....is this yet another Onion story?

Wed, 10/06/2010 - 09:15 | Link to Comment 99er
Wed, 10/06/2010 - 09:22 | Link to Comment Bill Lumbergh
Bill Lumbergh's picture

What were they saying at 1.19 EUR/USD...if you look at a long-term chart of the Euro we are putting in another large rounded top (from 2002 to present following a previous rounded top) with a series of lower highs and lower lows.

Wed, 10/06/2010 - 09:28 | Link to Comment primefool
primefool's picture

Dollar goes down until it makes sense to manufacture our own cell-phones ( BTW - not one cell phone used in the US is made here).

Wed, 10/06/2010 - 09:30 | Link to Comment tygar45
tygar45's picture

All chips forward short EUR/USD

Wed, 10/06/2010 - 09:36 | Link to Comment tom
tom's picture

The dollar and euro will continue to teeter-totter as they drive each other down versus precious metals and the yen and franc.

I wouldn't bet heavily either way on the EURUSD, unless you've got a knack for second-guessing the timing and quantity of central bank intervention.

$1.55 is a pretty aggressive prediction, that would be the dollar putting on some serious QE lead shoes and keeping the euro dangling in the air till next year, until there's another, worse sovereign debt crisis to finally bring it back down. But I figure the ECB would somehow loosen up in such a scenario. I'm thinking the euro tops out somewhere between $1.45-$1.50.

Wed, 10/06/2010 - 09:36 | Link to Comment Belrev
Belrev's picture

Dollar being the carry trade funding currency, does it mean that stock market is about to plunge and take down with it gold and oil?

Wed, 10/06/2010 - 10:03 | Link to Comment Oso
Oso's picture

interestingly, its 15% cheaper to fund in JPY right now.

Wed, 10/06/2010 - 10:56 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Ding ding ding! Belrev, the dollar is going to spike as investors panic from all other supposed "risky" currencies during the crash over the next few months. The question is how long can the Fed keep juggling the flaming torches in the market?

Wed, 10/06/2010 - 09:45 | Link to Comment fresbee
fresbee's picture

The simple take home: buy the dollar.

 

Simply dumb. Facing complete implosion and u  r recommending a buy on dollar. I would love to know your background other than literary writing. Have you ever worked on a buy side job? I mean who even while you put that post, EURO blasts the top side of 1.385 and any smart chartist will tell you there is no topping process yet. Infact eur/jpy and eur/gbp are clearly indicating some severe upside for EUR/USD maybe after a weak retracement. GS is not an indicator in any way. 

 

GS gave a target of 1250 for S&P which was pretty much achieved in 2009. 1225 to be exact. Yes GS got the call on eur/usd wrong but almost everyone except the insiders got it right. And GS is not doing what they put out on dumb blogs where a few thousand retail guys are loading up in their free time. I mean folks who invest 10k or 20k kind of crowd. 

Tyler you need to focus a lot more on getting ur analysis spot on. You have been spectacularly wrong for much of 2009 and 2010 where you been seeing a complete to world trade. Except of course Gold!

Wed, 10/06/2010 - 09:48 | Link to Comment Belrev
Belrev's picture

I gather that your recommendation is to go heavy long on EUR, correct?

Wed, 10/06/2010 - 09:52 | Link to Comment fresbee
fresbee's picture

eur all the way unless I see a break of 1.358. max upside in eur/jpy and close second to be eur/gbp followed by eur/usd. All these guys should give combined 3000 pips in 3 months time. I am also watching AUD which has pretty much neared its long long long term target of .99/1.0

Wed, 10/06/2010 - 10:26 | Link to Comment Bankster T Cubed
Bankster T Cubed's picture

GS is a fountain of disinformation

fade every call

Wed, 10/06/2010 - 12:44 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"GS is a fountain of disinformation

fade every call"

Most astute comment of all. Short and sweet...and, true.

Wed, 10/06/2010 - 12:04 | Link to Comment ZeroPower
ZeroPower's picture

Yes GS got the call on eur/usd wrong but almost everyone except the insiders got it right.

GS constantly puts out wrong calls (look at their sell side equity reports - NOT just for retail).  Also,  the insiders will go AGAINST anything what they put out as their 'advised' plans.

Remind us your position ...middle, or perhaps b/o?

Wed, 10/06/2010 - 10:10 | Link to Comment GFORCE
GFORCE's picture

They had a good run there- 1.19-1.38. Too easy for them. Add a chunk of msm hype, throw out a few qe2 stories and bid up everything related to 'risk'. All assisted by POMO.

Anyone who thinks the fed is backed into a corner needs to reconsider what's at stake here.

Wed, 10/06/2010 - 10:59 | Link to Comment matthew1182
matthew1182's picture

Very interesting how they would make this call as we are sitting at the 61.8 retrace of the 11/09 high.

Wed, 10/06/2010 - 11:22 | Link to Comment Hdawg
Hdawg's picture

How long will it take to get this story off the first ZH page?

Wed, 10/06/2010 - 11:53 | Link to Comment markar
markar's picture

China' got to be the wild card here. They seem to be placing their bets on a weak USD even though it's causing them big losses in their treasury holdings(keeps the yuan low)They are also supporting EUR for obvious reasons.

GS may be right this time. Buy USD at your own peril.

Wed, 10/06/2010 - 16:32 | Link to Comment Hdawg
Hdawg's picture

Wow,

I was only doing data collection.

 

Thanks and Bye.

Thu, 10/07/2010 - 02:22 | Link to Comment Bagsnatcher
Bagsnatcher's picture

There is a veruy interesting story on GS and how they manipulated EUR/SEK yesterday if anybody cares to dig. They had the Renault-Volvo transaction

Thu, 10/07/2010 - 03:24 | Link to Comment boogey_bank
boogey_bank's picture

What could happen to euro/gold pair on No QE2 announcement on November 3rd?

Will the eur/usd plung offset the gold plunge?

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