The more the market sees of the Greek bailout, the less they like it. We’ve fallen as low as 1.3634 on EBS as longs taken on the back of prospects for a Greek deal are unwound and shorts that were covered are re-established.
One cautionary note: Just as late last year, analysts were falling all over themselves to post the highest EUR/USD forecasts. Now they are doing the reverse. 1.15 is getting lots of focus and a eventual downside target.
My fair-value range for EUR/USD is between 1.15/1.25, so given the US’s fiscal position, I would put a downside target at the higher-end of fair value, toward 1.25, in the months ahead.