The beginning of the end to the EUR rally?


Danske Research discusses EUR/USD outlook and maintains a structural bearish bias over the coming months.

“We note that in tandem with EUR/USD loosing steam Eurozone equities
are beginning to underperform US peers – and also more generally that
value is beginning to underperform growth. In our view, this is an
important development to follow when it comes to the direction of
EUR/USD. As explained over the last weeks we still have a strategic bearish bias for EUR/USD even if our tactical conviction is less clear,” Danske notes.

“To the extent central banks next week (primarily Fed, ECB) deliver a
fairly firm hawkish guidance – especially when taking into account the
last quarter’s easing of financial conditions – we think a long USD position is beginning to look appealing again, perhaps even from a tactical perspective.
Either way next week could prove pivotal for the global investment
environment that will face us for the rest of February,” Danske adds.

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