12.09.2014 - We recommend holding short positions on the euro

The price of euro has stabilized, but soon may continue downward movement. Today, we should not expect sharp price movements as investors will not rush to build up positions ahead of the weekend. At the moment, there is no reason to expect a change of the negative trend. On the other hand, there are a number of factors, which points to a further price decline of euro.

First of all reduction of EUR/USD will be contributed by the difference between the monetary policy of the Fed and the ECB. Also it is worth noting that the last easing of monetary policy when ECB's interest rates were reduced to -0.20% on deposits and to 0.05% for loans that have not yet taken into account in the prices. US macroeconomic indicators point to improving the situation in the country, and the weakness in the euro area economy and there is a high probability of further deterioration, also due to sanctions that were imposed against Russia. Traders are waiting for the Fed meeting which may indicate the timing of interest rate hikes, which will strengthen the dollar.

We recommend holding short positions on the euro with the closest target of 1.28 and forecast a decline to 1.25 in the medium term.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.