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EUR/USD dips on USD relief rally – Danske Bank

EUR/USD edged lower toward the 1.14 mark, as the broader USD staged a modest rebound across the G10 space, Danske Bank's FX analysts report.

Buy-the-dip bias intact amid USD positioning risks

"The move followed easing signals on the trade front, with Treasury Secretary Bessent noting that the tariff standoff with China is 'unsustainable,' triggering a mild relief rally in risk assets."

"In this week's edition of Reading the Markets USD, we highlight that aggregate USD positioning is now approaching stretched short territory, while the cost of hedging further USD downside has reached record highs in the options market."

"Overall, with investor confidence in US assets continuing to deteriorate and concerns over the economic outlook potentially deepening, we prefer to tactically buy EUR/USD on dips and maintain a strategically bullish stance on the cross, now targeting 1.22 over the next 12M."

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FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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