EUR/USD: Morgan Stanley's weekly dollar and euro forecast for this week

This weekend, Morgan Stanley gave its weekly forecast for the euro and the dollar for the week of 7 December 2015:

EUR: The magic is ending, bearish bias

"Draghi's decision to lower the deposit rate by only 0.10% and to extend the duration but not the monthly size of the QE is a disappointment for the markets. The markets had in fact expected flexibilities to be more pronounced, or at least that the door remains open for further rate cuts. So attention will now turn to the Fed, and this event will be a chance for the EUR to fall again, if the Fed is more hawkish than expected. "

USD: Bullish bias

"We are sticking to our medium-term bullish view of the USD, but we are taking into account that due to the disappointment of the ECB, EUR/USD rallies could have a wider impact on the forex, putting pressure on the USD over other pairs. We therefore remain a buyer fn the USD against emerging currencies, but we are more wary of the G10 currencies."