EUR/USD still a ‘sell on rallies’ – Danske Bank

Arne Rasmussen, Head of FI Research at Danske Bank, recommended selling the pair on occasional bullish attempts.

Key Quotes

“EUR/USD initially bounced on the ECB announcement but fell thereafter when the market realized that the policy change was in a more dovish direction than it initially appeared”.

“At the press conference, Draghi clearly struck a dovish tone, stressing that sustained ECB presence in the markets is the main message”.

“Near term, we see EUR/USD in a 1.05-1.10 range with the balance of risks skewed towards a break to the downside”.

“As such, EUR/USD is a sell on rallies within the 1.05-1.10 range. We forecast EUR/USD at 1.05 in 1M and 1.04 in 3M before a sustained move higher to 1.08 in 6M and 1.12 in 12M”.