Senior Analyst at Danske Bank Mikael Milhoj suggested dips in spot could be regarded as buying opportunities.
Key Quotes
“EUR/USD finally broke below the technically important 1.13 mark yesterday, and while we maintain that the cross is set for a decent recovery back to the mid-1.20s in 2019, we still see a range of factors keeping the cross under pressure towards year-end, notably the relatively cyclical and yield outlook”.
“The cross is in uncharted territory which opens up for a test of the Jun-17 lows around 1.1110-20. Thus, in our view, it is too early to go long EUR/USD, but we are increasingly biased towards buying the cross on dips and clients with income/assets should look to gradually increase USD hedge ratios on dips below 1.12″.
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