EUR/USD: What Will It Take To Break 1.1575 Lower Or 1.880 Higher...And When? - Danske



Danske Bank FX Strategy Research discusses EUR/USD outlook in the near-term and long-term.
"What will it take to break the 1.1575 level (27 Oct low)? A re-pricing of the short end of the US curve ahead of a Dec Fed hike. Likely ahead of year-end, in our view.
What will it take to break the 1.1880 (12 Oct high)? Upside eurozone inflation surprises. Unlikely before mid-2018, in our view," Danske argues. 

Outlook: Downside risks near term, upside further out:

"Near term, risks are on the downside from both USD (risk of Fed re-pricing, US tax reform progress) and EUR (EU political risks, ECB halting ‘normalisation’ trades)
Longer term, risks remain on the upside on valuation and debt-flow reversal arguments. prepare now for EUR/USD rebound part II in 2018," Danske projects.

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