EUR/USD a ‘sell on rallies’ – Danske Bank

Pablo Piovano FXStreet

Kristoffer Lomholt, Senior Analyst at Danske Bank, suggested the pair still remains a ‘sell on strength’.

Key Quotes

“Following a muted initial reaction to ECB last week, EUR/USD broke key resistance levels including the 2017 high of 1.2092 towards the end of last week as markets digested the impact of a softening euro-zone outlook”.

“A key driver in majors recently has been a seeming recoupling of USD crosses to interest rates, notably 10Y yield spreads. While the US 10Y yield is currently back below the 3% mark, we see potential for support to USD crosses from this factor near term as the US holds a favourable cyclical position amid sustained weakening elsewhere”.

“Positioning should be somewhat lighter now on notably EUR longs, but we continue to see EUR/USD as a tactical sell on rallies near term”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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