Mikael Milhoj, Senior Analyst at Danske Bank, noted the pair could still test the area of recent cycle lows around 1.1510.
Key Quotes
“In majors, EUR/USD edged higher yesterday as hopes of a more market-benign Italian government gained traction. However, we still think the bottom is ahead in the cross on USD backing from the current carry and cyclical environment for now”.
“However, EUR/USD longs have been significantly reduced in recent months, thus leaving positioning less of an argument for further downside in itself. In the near term, the key as to whether we will test last week’s low of 1.1510 will be the proposals due from the new Italian government”.
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