TD Research discusses EUR/USD outlook, and notes that an important theme that should amplify the drawdown in the G10 is the fact that Europe has lost some growth mojo.
"The past year the market has been tripping over itself to upgrade growth views on the major European economies. Indeed, most of the major European currencies have scored quite well on growth revisions (BBG) relative to the rest of the G10 (and the US) over the past year...
We are not ready to call the end of the European reflation trade but the signals of these high-frequency growth dynamics underscore the immediate risks of a deeper correction in the EUR," TD argues.
TD maintains the view of looking to buy EUR/USD on any pullbacks towards 1.21 and likes buying into EUR/CAD dips.