Back
28 Jan 2015
Divergen monetary policy might lead EUR/USD towards 1.10 – Danske
FXStreet (Barcelona) - According to Danske Bank, fundamentally, the divergent monetary policies might weaken EUR/USD pair further, and hence target 1.10 levels for the pair in 6 months.
Key Quotes
“EUR/USD remains oversold by most technical measures despite yesterday’s increase and our short- term financial model also suggests that the cross is significantly oversold ,trading 3.1 standard deviation below the model’s fair value estimate of 1.1742 (spot ref.: 1.1350).”
“Moreover, speculative accounts remain very long USD and short EUR according to the latest IMM positioning data, which keeps the cross very sensitive to correction risks.”
“We do not expect any significant changes to the FOMC statement tonight and given the latest sell-off in the USD this should not trigger any significant market reaction. In our view risks are fairly symmetrical.”
“Fundamentally, we still look for a further decline in EUR/USD driven by divergent monetary policy and target the cross at 1.10 in 6M.”
Key Quotes
“EUR/USD remains oversold by most technical measures despite yesterday’s increase and our short- term financial model also suggests that the cross is significantly oversold ,trading 3.1 standard deviation below the model’s fair value estimate of 1.1742 (spot ref.: 1.1350).”
“Moreover, speculative accounts remain very long USD and short EUR according to the latest IMM positioning data, which keeps the cross very sensitive to correction risks.”
“We do not expect any significant changes to the FOMC statement tonight and given the latest sell-off in the USD this should not trigger any significant market reaction. In our view risks are fairly symmetrical.”
“Fundamentally, we still look for a further decline in EUR/USD driven by divergent monetary policy and target the cross at 1.10 in 6M.”