EUR/USD buy the dips below 1.17 – Danske Bank
|Senior Analyst at Danske Bank Kristoffer Lomholt sees drops below the 1.1700 handle could be buying opportunities.
Key Quotes
“The aftermath of the Catalonian independence referendum is a downside risk for EUR crosses at the start of the week and could keep alive worries that eurozone political risks have not evaporated entirely after all”.
“If the US ISM comes in strong today, we could see we see EUR/USD re-test last week’s lows. Notably, the weekly IMM positioning data showed that new speculative longs in the cross were added in the week to last Tuesday, which suggests that risks remain on the downside”.
“That said, we would still like to buy the cross on dips below 1.17 as we believe the ECB – notably both Peter Praet and Benoît Cœuré, due to speak this week alongside the release of minutes – will confirm that the ECB will announce a scale down in asset purchases in October and thus that policy ‘normalisation’ is slowly moving to tope of the ECB policy agenda”.
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