EUR-USD prediction next week may 28 2012

forex trading outlook today - EUR-USD prediction next week may 28 2012 : The relentless decline in the EUR/USD touched fresh trend lows at 1.2514 after rumours of joint central bank liquidity intervention to Europe, aka another LTRO, were dismissed. The Euro has currently staged a mild recovery towards 1.2540, Asian highs now, as the market still protects the 1.2500 barrier.

Greek exit risks, contagion concerns, slow growth and limited safe haven alternatives suggest that the recent run lower in EUR/USD may extend further in the weeks ahead. EUR/USD’s tumble to its lowest point in nearly two years this week brings our mid-year USD1.24 target within reach.

Sharp adjustments in the spot rate start to look stretched at +/-10% over three months relative to the past three month period. On that basis, the USD1.20 area might be reachable in the next two months (10% below the USD1.33 level prevailing in EUR/USD at the start of this month)

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