Danske Bank FX Strategy Research notes that EUR/USD gained during today’s ECB Draghi’s press conference and still trades in overbought territory.
“Hence, we see risks skewed on the downside in the near term. In particular, we note that EUR/USD price actions contrast with European fixed income markets, where, for example, 2Y EUR swap interest rates fell back after the press conference, while EUR/USD remained higher.
Our short-term financial models cannot fully explain the move higher in EUR/USD (given lower interest rates).
Moreover, positioning and other short-term technical measures such as the RSI also indicate that the risk of correction lower in EUR/USD is high,” Danske argues.
However, we maintain the view that any dips in EUR/USD are likely to prove short-lived and, strategically, we still like to buy the cross on dips.
Source: Danske Bank Research
The article is published by one of the foremost sources of Forex trading information. Link to the original article above.
from Online Forex Trading Resource
View thesource article here