EUR/USD made a move above 1.19 but failed to stabilize on higher ground. It then made a significant correction. What’s next? Here are two opinions

Here is their view, courtesy of eFXnews:

USD: Weakness To Get Deeper; EUR/USD To Break 1.20 By September – BTMU

BTMU FX Strategy Research predicts the EUR/USD rate could break the 1.20 level by September.

According to BTMU, political uncertainty in the US is weighing heavily on the USD, with a potential break below key technical support possible.

In particular, BTMU argues that future USD weakness is likely to prove deeper and more prolonged than widely assumed citing the Trump administration’s failure to pass healthcare reform as highlighting legislative gridlock.

With forthcoming budget negotiations due to begin, BTMU argues the impact on the dollar could result in a dollar sell-off of over 3%.

“We see no evidence that the tide is going to turn over the short to medium term. There’s plenty of scope for further weakness and the dollar is still materially overvalued,” BTMU concludes.

EUR: Still Some Room To Run But Via A Slower And Bumpier Ride – CIBC

CIBC FX Strategy Research argues that while the EUR has been on quite a roll recently and remains the best performing major year-to-date versus the USD, further appreciation from here is likely to be a slower and bumpier ride.

“Having been highly undervalued on most measures of purchasing power at the start of the year, the euro is now closing in on levels that are considered fair value.

There’s still some room to run, and currencies can often under and over-shoot these measures of fair value significantly.

However, the current higher value of the currency combined with the change in speculative positioning already seen will make further appreciation harder to come by,” CIBC argues.