Goldman Sachs will not play briefly against the euro

One of the largest and most important players in the world has just announced that it is reducing short positions on the European currency. Can this cause a rapid appreciation of the euro against other countries' currencies? A lot will be explained during the meeting European Central Bankwhich is scheduled for Thursday.

Until recently, Goldman Sachs maintained the recommendation for the couple EUR / JPYwho recommended a short position on it. But financial giant analysts have just decided to withdraw it. Why?

Goldman Sachs: the euro will go up

According to the analysts employed by Goldman Sachs, they came to the conclusion that currently the euro is at such a low level that it is only a matter of time to rebound and recover. Moreover, they are convinced that this will be the case even if the unfavorable scenario for the euro comes true, which implies the introduction of mitigation measures.

What will change the meeting of the European Central Bank?

The ECB meeting will be held on Thursday. Analysts agree that there will be no good news for the European currency. The market expects mainly a reduction in interest rates on deposits by 20 basis points. It is also about buying bonds and fighting to keep interest rates low. Despite such market consensus, Goldman Sachs is starting to look at the EUR / JPY pair. I mean, it says it's getting started because most Forex traders are well aware that since it's been decided to announce it, some, if not most, positions are probably already taken.

Forecasts for the EUR / JPY pair

Indeed, the daily chart shows as if the EUR / JPY pair bounced back from the bottom. If Goldman Sachs analysts are not mistaken, they can quickly reach a course around 119.500 and even 121.100. This already gives a profit at a level exceeding 300 pips.

Chart EUR / JPY, H4 interval. Source: xNUMX XTB xStation

However, this is not the end. If you manage to overcome the resistance level located around 121.100, then reaching the 123.000 level should be easy. Further increases are also within reach, because this year's peak near 127.400 is still a long way away.