EUR/USD slipped below 1.13 and looks heavy. But perhaps it can rebound.
Here is their view, courtesy of eFXdata:
Danske Research discusses EUR/USD outlook in light of maintaining its forecasts unchanged at 1.15 in 1M, 1.17 in 3M, 1.20 in 6M, and 1.25 in 12M.
“Carry momentum for USD is fading on the back of the Fed’s soft rhetoric and even if another rate hike or two is in the cards, we do not think this will be a major source of dollar support. We have for some time argued that the next big move in EUR/USD will be higher as monetary policy divergence fades and the cross is undervalued. While a Fed that is now effectively on hold has been the first stage, we think the next trigger for rebound will be a US-China trade deal. Whether the ECB will fuel a third stage in this rebound remains an open question, but a first hike looms as a key EUR-supportive factor,” Danske notes.
“For now, 1.15 should act as an attractor for the cross. We have left our forecast profile unchanged and thus continue to see EUR/USD at 1.15 in 1M, 1.17 in 3M, 1.20 in 6M, and 1.25 in 12M,”Danske adds.
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