JPMorgan Research adopts a structural bearish bias on EUJR/USD in 2023 targeting the pair at 0.95 in Q1 and Q2 as well.
- “Our economists’ expect the Fed and the ECB to pause in 1Q23 at 5% and 2.5% for the rest of 2023, leaving the policy rate differential just 50bp shy from its 15-year low. The outlook envisions a mild recession in the US at the end of 2023, which should hamper recovery in the Eurozone (EU is expected to grow by 0.2% vs. US of 0.4% next year),” JPM note.
- “The baseline for 2023 looks for EUR/USD to average 0.95 in 1H, with a test towards 0.90 possible (assumes no de-escalation in geopolitics). A Fed pause is not a sufficient condition for a rebound in the EUR/USD. Trading strategy is tactical, with risks being an ongoing improvement in regional growth momentum or a potential ceasefire,” JPM adds.
EUR bears have had a hard time under parity.