EUR/USD was already on the way down, but it somehow recovered. The range is friendly to the pair. What’s next?
Here is their view, courtesy of eFXnews:
Danske Bank FX Strategy Research is still looking for a final dip lower in EUR/USD over the Summer arguing that the slowdown in US and China should spill over to the eurozone and weigh on the single currency accordingly.
“We stress that this is a short-term view and the bigger move will be a substantial shift higher in EUR/USD on 6M-12M when we move closer to an exit for the ECB,†Danske argues.
“We expect US and Germany bond yields to be range-trading over coming months with a possible slight upside bias in the US where economic expectations may be bottoming out. We expect global equities to be caught in a range, as the weaker global cycle is counter-weighted by strong earnings, particularly in the eurozone. We think we are in an interim period between two reflation periods and in this period markets will trade in a range,†Danske adds.
In lie with this view, Danske maintains a tactical short EUR/USD position targeting a move towards 1.0850.
