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 still looking for a final dip lower in EUR/USD over the Summer arguing that the slowdown in US and China should spills over to the eurozone and weight 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 counterweighted 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.
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