Mikael Olai MilhÃ¸j, senior analyst at Danske Bank, points out that the EUR/USD pair has managed to recover somewhat on Friday but even a weak US jobs number did not manage to lift the cross above 1.1250.
“As we deem that the US is closer to turning cyclically than the euro zone, if data starts to surprise on the upside, e.g. retail sales today where we have an above-consensus call, it could send EUR/USD towards new lows. After the ECB’s dovish signals, we think the cross could slide towards 1.10 near term.”
“Meanwhile, IMM Positioning data suggested that speculators continue to prefer longs in cyclical commodities like oil and copper – a hint that markets are increasingly positioning for a trade deal and a Chinese growth stabilisation. This hints that the knee-jerk to a trade deal may be limited.”