Credit Agricole FX Strategy Research notes that the EUR has been under pressure this week, irrespective of Emmanuel Macron winning the second round of French presidential election.
In that regard, CACIB notes that given that such an outcome was largely anticipated and as EUR long positioning had already risen in reaction to the first round, this week’s price action can only be regarded as a ‘sell the fact’ reaction.
Strategy-wise, CACIB doesn’t exclude additional downside risks but remains in favor of buying dips towards 1.0700-1.0800.
“This is due to the notion that the ECB will consider a change in forward guidance in June and as a taper is likely to be announced in September,” CACIB argues.
EUR/USD is trading circa 1.0912 as of writing.
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