In view of Analysts at Danske Bank, spot is seen extending the 1.15-1.21 range in the next 6-months.
“We have made only minor changes to our forecast profile as we continue to see the negatives (trade war, carry appeal of USD, ECB on hold, Italy risks) dominating the longer term EUR positive impulses stemming from valuation and a turn in capital flows”.
“Specifically, we expect EUR/USD to trade broadly within the 1.15-1.21 range over the next 6M period”.
“However, our medium-term story remains unchanged: we believe the capital outflows of recent years will fade as we move closer to the first ECB hike. Alongside valuation, this is set to support EUR/USD in 6-12M. We see EUR/USD at 1.16 in 1M, 1.16 in 3M (previously 1.17), 1.20 in 6M (unchanged) and 1.25 in 12M (unchanged)”.