Societe Generale FX Strategy Research argues that going into this week’s ECB meting, it’s too soon to look for much open debate about scaling back the pace of ECB bond-buying.
“The EUR still looks strong relative to yield differentials and may remain stalled in the current range for a while. But that doesn’t alter the longer-term positive outlook,” SocGen adds.
On the technical front, SocGen’s analysts expect a pause with EUR/USD 1.1043 as support before a push up towards 1.1390, with EUR/JPY levels for the same move at 121.80 and 129.65 (if we break 126).
“EUR/USD 1.14 and EUR/JPY 130 are sensible targets, to which we would add 88.5 for EUR/GBP, though in the longer term, we still see EUR/GBP trading up through 0.90 again,” SocGen argues.
Source: Societe Generale Cross Asset Research
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