EUR/USD has many moving parts shaking it in all directions. The team at Credit Agricole sees a sell opportunity but prefers waiting for a better opportunity:
Here is their view, courtesy of eFXnews:
Euro downside has been limited of late, irrespective of intact uncertainty as when it comes to French politics. In particular former French PM Juppe explaining that he will not run for presidency has had only limited currency impact. The currency’s resilience may be partly due increased speculative short positioning. In fact, according to our FX positioning gauge, speculative Euro short positioning rose to multi-week extremes.
Considering that the ECB may consider a change to its forward guidance (supporting the view that the lower bound in rates has been reached) and as Friday’s US labour data is unlikely to push long-term Fed rate expectations higher one cannot exclude that better levels closer to 1.07 and above will be reached before considering to sell the single currency anew.
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