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4 May 2015
Broader outlook on EUR/USD remains bearish – Danske Bank
FXStreet (Edinburgh) - In the opinion of Pernille Nielsen, Senior Analyst at Danske Bank, the perspective for the pair remains negative despite the recent and surprising upside.
Key Quotes
“On a broader note, we have to say that the sustained move higher in EUR/USD in recent weeks has been a clear surprise to us: we have for a while been arguing that another leg lower should take place driven by a turn in relative data surprises in favour of the USD”.
“This has only partially materialised so far: the US surprise index has remained solid in negative, whereas euro surprises have turned less positive – but for the single currency the latter has been counteracted by a less dire Greek prospects”.
“Positioning, which has long been stretched on USD longs, EUR shorts, has been a key obstacle as well”.
“However, crucially, fundamentals have not changed materially in our view and we maintain that EUR/USD will head lower ahead of a first Fed hike. Needles to say, a strong payrolls this Friday would be an important stepping stone”.
Key Quotes
“On a broader note, we have to say that the sustained move higher in EUR/USD in recent weeks has been a clear surprise to us: we have for a while been arguing that another leg lower should take place driven by a turn in relative data surprises in favour of the USD”.
“This has only partially materialised so far: the US surprise index has remained solid in negative, whereas euro surprises have turned less positive – but for the single currency the latter has been counteracted by a less dire Greek prospects”.
“Positioning, which has long been stretched on USD longs, EUR shorts, has been a key obstacle as well”.
“However, crucially, fundamentals have not changed materially in our view and we maintain that EUR/USD will head lower ahead of a first Fed hike. Needles to say, a strong payrolls this Friday would be an important stepping stone”.