EUR/USD Downtrend Is Strong And Drop To 1.2000 Level Highly Likely

EUR/USD is in a strong downtrend since June 2014. EUR/USD downtrend started when it got rejected from the resistance of 1.3993. It has now fallen to 1.26664. Market analysts are predicting that this downtrend will continue and EUR/USD will reach 1.2000 level in the next 12 months. Nomura predicts the shared currency will fall to $1.20 by mid-2015 as the European Central Bank signals further monetary stimulus that tends to weaken the currency, while the Federal Reserve stays on course to end bond purchases next month. The euro dropped more than 7 percent this quarter to $1.2684 on Sept. 26 in New York.

Mario Draghi’s strategy for reviving the euro area looks like devaluation. While the European Central Bank president says the exchange rate isn’t a policy target, officials aren’t secretive about their approval of the currency’s 9 percent slide. The depreciation increases the cost of imports and boosts exporters’ competitiveness, aiding the effort to revive inflation that data tomorrow will probably show is at the weakest since 2009.

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