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EUR/USD is gradually sliding to lower ground, dropping from the 3-year highs. What’s next after the current range trading?

Here is their view, courtesy of eFXnews:

Danske Research discusses EUR/USD outlook, and believes that in the short term,  the uptick in EUR/USD is set to take a short break and sees the pair staying broadly within the 1.21-1.26 range.

We could see EUR/USD dip into the lower end of the range in the very short term  as USD funding costs are rising due to the expectations of tighter USD liquidity and repatriation of overseas earnings in relation to the US tax reform.

On a 6-12M horizon we still expect EUR/USD to move higher, and target 1.25 in 6M and 1.28 in 12M, and we see the risks as skewed towards EUR/USD moving higher than we currently project. While relative rates would normally indicate EUR/USD should move lower, other factors are dominating at the moment,” Danske argues.

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