EUR/USD seen lower in the near term – Danske Bank

Chief Analyst at Danske Bank Jens Sorensen sees the pair grinding lower within the next 3 months.

Key Quotes

“EUR/USD has been trading with a bid tone since Donald Trump’s press conference on Wednesday where he provided absolute nothing concrete on his economic plans”.

“The cross has broken up through the 55-day moving average and a break of the 1.0700-1.0750 range will open the door for further near-term gains, especially if the ECB comes across as slightly hawkish on Thursday (though this is not our base case)”.

“However, we look for EUR/USD to move lower on a three-month horizon as the market prepares for the next Fed hike and uncertainty over European politics intensifies around the French elections in April/May”.

“However, we retain the view that EUR/USD will move higher later in the year on the back of strong current account flows in favour of the euro area and that the euro is fundamentally undervalued”.