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Feb 13 - 11:00 AM

EUR/USD: Looking Quite Cheap & Oversold But Not Yet A Buy - Credit Agricole

By eFXdata  —  Feb 13 - 10:07 AM

Credit Agricole Research discusses EUR/USD outlook and notes that while the single currency looks quite cheap around current levels, it migh be premature to expect a sizable rebound just yet.

The latest EUR/USD slump has pushed the pair deep into undervalued territory. Indeed, our short-term fair value model - based on rate spreads, yield curve box spreads and EGB sovereign credit spreads as well as relative terms of trade and stock market performance - points at an equilibrium value of around 1.1050 at present," CACIB notes. 

"EUR/USD is increasingly looking cheap and, according to our positioning indicators, oversold. The question remains, however, whether the currency pair remains a buy. We think that it may be premature to expect a rebound in EUR/USD just yet. Indeed, abating coronavirus concerns are boosting demand for USD carry trades," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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