EUR/USD seen between 1.08/1.14 in 3-month – Danske Bank
|Chief Analyst at Danske Bank Jens Sorensen expects the pair to stay sidelined between 1.08 and 1.14 in the next three months.
Key Quotes
“The upside momentum in EUR/USD has faded somewhat with the cross falling below the 1.12 level again on Friday helped by Wednesday’s FOMC minutes confirming the Fed’s willingness to move on with normalisation, both in terms of rate and balance-sheet size”.
“We note that sentiment towards EUR/USD has changed driven by political risks reversing and by eurozone growth and equity outperformance. We stress that while valuation still suggests upside potential medium term, the cross looks increasingly vulnerable to a likely rollover in the European business cycle”.
“We emphasise, however, that both an ECB not ready to change signal on rates and a Fed determined to both hike and initiate Quantitative Tightening should keep the cross in the 1.08-1.14 range within 3M”.
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