Market Analytics and Technical Considerations
“In 1Q23, according to our economists, the Fed and the ECB will stall at 5% and 2.5% respectively for the remainder of 2023, keeping the policy rate divergence barely 50 basis points above its 15-year low. The prognosis predicts a little US recession by the end of 2023, which could impede the Eurozone’s recovery (EU growth is predicted to be 0.2% next year compared to US growth of 0.4%) “JPM notation
“The benchmark expectation for 2023 is for the EUR/USD to average 0.95 in 1H, with a probable test of 0.90. assumption, no de-escalation in global political arena. For the EUR/USD to recover, a Fed pause is not a necessary prerequisite. Risks include a probable cease-fire or a continual improvement in regional GDP momentum. Trading approach is tactical “JPM adds.
Under parity, EUR bears have struggled to make gains.
