Credit Agricole CIB FX Strategy Research notes that that the EUR has been well supported as of late, regardless of both ECB President Draghi and the central bank’s Chief Economist Praet suggesting that core prices remain subdued.
“It appears that a more constructive risk asset related capital flow situation has been keeping the single currency supported. However, with investors’ focus shifting back to price data and as we do not excluded that next week’s preliminary May CPI reading will surprise on the downside,” CACIB argues.
“…We advise against buying the EUR around the current levels. This is especially true as speculative EUR long positioning has reached levels not seen in several years. While keeping a constructive long-term view, we believe better levels for engaging in longs will be reached,” CACIB advises.
EUR/USD is trading circa 1.1180 as of writing.
Source: Credit Agricole CIB Research
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