EUR/USD: 4 reasons why the pair should continue to decline (Credit Suisse)

Credit Suisse believes that the EUR/USD should continue to fall on the forex, in particular due to a strengthening of the dollar.

"Following last week's FOMC, the USD has strengthened, especially against foreign currencies like the EUR, CHF and JPY. Here are the reasons:

1- The Fed is raising its interest rate projections. This has revived the idea that rate divergence will be a major theme in 2017.

2- Lack of discussions on the USD. Neither the Fed statement, Yellen's speech nor the press conference mentioned the dollar, despite its progression since Trump's election. This suggests that the dollar rise is not as worrying as the markets thought.

3- Positioning. Investors had reduced their positions on the USD before the FOMC and now seem to be returning to this currency.

4- The ECB's commitment to keeping interest rates low. The euro should also remain on a downward trend.

The EUR/USD's break of 1.05 is in our view a major development, as the threshold has been a solid support for almost two years. "

Credit Suisse maintains a short EUR/USD position initiated at 1.0455 and a buy limit order on the USD/JPY.