EUR/USD: headed back to 1985 lows and below parity? - BBH

Analysts at Brown Brothers Harriman explained their outlook for EUR/USD.

Key Quotes:

"The euro peaked in 2008.  

From 2008 through mid-20014, the euro traded in a broad range between $1.20 and $1.50.  

After 2011 though, it was capped near $1.40.  The euro broke down in H2 14, and since early 2015 has moved in a narrow $1.05-$1.14 range with a few exceptions.  

We anticipate that the consolidation will be resolved with another leg lower.  

On the chart, we drew a trendline of the synthetic euro low during the Reagan dollar rally (~$0.6445) and the low of the Clinton dollar rally (~$0.8230).  

That trendline comes in near $1.000 by the end of the year.  

That roughly coincides with a 61.8% retracement of the euro's rally from the 1985 low to the 2008 high (~$1.01).  

A break of that area, which is also of psychological importance, would open the door to a fall toward $0.8200-$0.8700."