EUR/USD dips should be short-lived – Danske Bank
|Chief Analyst at Danske Bank Christin Tuxen believes that occasional dips in spot are expected to be short-lived and shallow.
Key Quotes
“We maintain that any dips in EUR/USD should be shallow and short-lived as fundamentals still provide support and as notably a reversal in debt flows is a key source of upside risks for the cross”.
“We see EUR/USD around current levels on a 1-3M horizon but stress that risks are on the downside in the very near term with a key risk being the appointment of a more hawkish Fed Chair”.
“That said, we do not think EUR/USD has the potential to drop much further with 1.1660 (17 August low) a key support level. We continue to stress that a 2018 rebound towards 1.25 is on the cards and that upside risks dominate the longer-term outlook. We have lowered our 1M and 3M forecasts to 1.17 (1.19) and 1.18 (1.19), respectively, but keep our forecast for 6M unchanged at 1.22 and for 12M at 1.25”.
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