Danske Research discusses EUR/USD outlook and maintains a constructive bias targeting 1.15 in 3 months.
"Though we remain cautiously optimistic on EUR and welcome the bounce higher yesterday, it was less than obvious. We tend to emphasise especially the global ‘reflation’-factor as being dominant in the cross, but US tech and software are still leading returns among cyclicals. Indeed, to reach our 3M target of 1.15 we should see a renewed clawback in ZAR, RUB, BRL and broadening outperformance in non-tech cyclical sectors," Danske notes.
"With the optimism with respect to European fiscal policy a bit on pause for the moment, it will likely be a decline in US continuing claims or similar that could reboot the global reflation trades more broadly when looking for known potential drivers this week," Danske adds.