EUR/USD was pressured but managed to recover. Where is it going next?
Here is their view, courtesy of eFXdata:
Societe Generale Cross Asset Strategy Research discusses EUR/USD trading strategy and stays sidelined in cash, but thinks that it might be ok to try a small long here with a tight stop.
“If you add growth concerns to the inflationary consequences of the trade dispute, the prospect of more Fed tightening and Fed balance sheet reduction, it wouldn’t be all that surprising for more money to find a rock to hind under, than to look for opportunities to get to work buying the dip. This is hardly a wonderful backdrop for the dollar, but it still seems to win the ‘best of a bad bunch’ award with most of the market.
Buying EUR/USD only makes sense as a super-optimistic bet that European politics will remain calm and that positions have been flushed out. It might be OK for a punt with a tight stop but our September 1.15 forecast tells you how comfortable we feel. We’re in a 1.10-1.20 range for now , with better times likely after the summer,” SocGen argue.
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