EUR/USD has been moving up and down but in a limited range. Will we see a breakout? Not so fast.
Here is their view, courtesy of eFXdata:
SocGen discusses EUR/USD outlook and adopts a tactical neutral bias, expecting the 1.15-1.17 range to hold in the near-term.
“The lack of downgrade from Fitch was followed by some encouragement that Italy budget proposals won’t be too outrageous and that’s calmed bond markets for now. The euro though, isn’t feeling much love.
EUR/USD 1.15-1.17 seems likely to hold for some time, but the euro still badly needs better data and higher rate expectations to underpin it,” SocGen argues.
“If we compare how US and Eurozone forward rate have evolved, we can see that Eurozone ones have fallen back since Q1, while US ones have remained in a tight range. It’s that fall in Europe that has hurt the euro, along with a recoupling between rates and FX after January’s build-up of excessive euro longs,” SocGen adds.
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