EUR choppy but weaker in 2016: 2015 was the year when the Euro finally weakened, but not on a smooth path. Looking ahead, we remain bearish on EUR, but expect the path to remain choppy. We project the EUR/USD to weaken to 0.95 by end-2016. At the same time, our year ahead top contrarian trade was for short-term EUR/USD upside. This suggests upside Euro risks in the short term, but still negative for the medium term. Our preferred bearish EUR trades are actually against non-USD crosses, particularly SEK and JPY. Don’t sell the Euro yet: Some indicators still point to upside EUR risks in the short term. The market remains short EUR. The ...
