EUR/USD advanced towards 1.1700 on US Dollar weakness following the Jackson Hole speech by Jerome Powell. What’s next? Here are two opinions.
Here is their view, courtesy of eFXdata:
Poised To Test 1.17 But Prefers EUR Upside Exposure Via Options Than Cash – TD
TD Research discusses EUR/USD outlook and thinks that prices are poised to test 1.17 in the near-term but prefers to express EUR upside via options.
“The EURUSD price action has turned more constructive, as it looks poised to make a test of the key 1.17 level. The weak EUR is the mirror image of the so-called King Dollar. We think the recent moves argue that the setup demonstrates more than just a simple positioning squeeze. The positioning element is well understood, but the macro narrative needs to change to release the energy of the coiling spring. The comments at Jackson Hole were important in this regard
For now, we prefer EUR exposure through options rather than cash and hold a 3m EURCAD risk reversal,” TD argues.
Fade The Jackson Hole Rally In EUR/USD – Nordea
Nordea Research discusses EUR/USD outlook and thinks that the post-Jackson Hole rally provides good selling opportunity in the near-term.
“The US economy will slow from here, but short-term there are reasons to fade the EUR/USD rally, as i) a SOMA-day is coming up, ii) Trump buying Italian bonds is not necessarily an EUR positive andiii) a hawkish part of Powell’s speech was overlooked,” Nordea argues.
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