EUR/USD: Dips To Prove Shallow; Where To Target? – Danske

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EUR/USD took advantage of the greenback’s weakness to make gains and reach out for the highs. What’s next?

Here is their view, courtesy of eFXnews:

In reaction to ECB’s recent flirt with stimulus exit talk, Danske Bank FX Strategy argued that as the ECB has let the genie out of the bottle for EUR/USD, it’s unlikely to expect any substantial dip in the cross near term (see here).

Danske still holds this view but notes that speculators are now net long EUR/USD which suggests risks are on the downside for the cross near term.

“That said, we emphasize that any dips in the EUR/USD are likely to prove shallow and short-lived. Thus, we continue to see the cross in a range of plus/minus a few big figures around 1.13 on a 1-3M horizon,” Danske argues.

“In our view, EUR/USD has the potential to rise towards the 1.20s as Fed-ECB divergence fades but the next move from current levels to, say,1.20 will be more ‘demanding’ than the one from below 1.04 to 1.14 seen in H1,” Danske adds.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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