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EUR/USD was hit by the Turkish crisis and managed to find some stability. What’s next? Can it recover on upbeat German GDP or will Turkey bring it down?

Here is their view, courtesy of eFXdata:

Danske Research discusses EUR/USD outlook in light of the possible impact of the ongoing Turkish Lira crisis.

Even in the event of a bold move from the central bank such as capital controls or a significant rate rise, we still doubt that the pressure on EUR/USD will evaporate near term:more fundamental TRY vulnerabilities (and in turn for EUR) have now been exposed, Italy fiscal risks linger for EUR, and the trade war issue remains a USD positive near term.

Furthermore, all this takes place in an environment of the Fed tightening policy both balance sheet and rate wise, which should keep USD bid for some time still.

Key technical levels have been broken on the downside in EUR/USD and a  key level to watch as low as 1.1119,” Danske argues.

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