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Jan 11 - 10:55 AM

EUR/USD: A Correction To 1.20 Healthy; A Move To 1.30 Likely Eventually But Not In A Straight Line - SocGen

By eFXdata  —  Jan 11 - 09:30 AM
Societe Generale Research flags a scope for a further near-term correction in EUR/USD but maintains a structural bullish bias targeting a move towards 1.30 over the medium to long term.
"The chart's a bit retro, showing short rate differentials and EUR/USD. In the old days, the current rate spread would have been consistent with EUR/USD around 1.30. Today, all we can say is that relative rates are no longer moving in the euro's favour, and EUR/USD has risen a lot on the back of a build-up of positions which needs to be reduced," SocGen notes. 
"We could draw a lot of pictures and they'd all pain the same story - a move in EUR/USD 1.20 accompanied by lighter positions and the passage of time, as we saw with the correction over the summer/autumn, would be healthy. A move to 1.15 would be excessive. A move to 1.30 is possible, even likely, eventually; but it's not going to happen,' SocGen adds. 
Société Générale Research/Market Commentary


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