EUR/USD is leaning to the downside as the greenback gains strength. What’s next?
Here is their view, courtesy of eFXnews:
Societe Generale Cross Asset Strategy Research discusses EUR/USD outlook and maintains its bullish medium-term bias over the coming months, advising strategic EUR bulls need to be patient in order to navigate more choppy price action ahead.
“EUR/USD 1.2450 is still a barrier to a break higher for the euro and Mario Draghi’s speech to the ECB-watchers’ conference in Frankfurt contained no hawkish surprises.
Mario Draghi’s speech in Frankfurt this morning concludes with the observation that monetary policy will remain patient, persistent and prudent. A PPP ECB policy may be enough to push EUR/USD towards PPP (purchasing power parity) but bulls need to be prudent and patient too. The OECD’s measure of PPP’s at 1.34 and that’s 8% from here and we’ll probably get there around the time of the first rate hike in a little over a year’s time.
In the meantime, more choppiness is likely, with a greater than usual focus on the chaotic nature of US politics,” SocGen argues.
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