Synopsis:

Danske Bank provides insights into their near-term trading strategies for three major currency pairs: EUR/USD, EUR/GBP, and USD/JPY. The strategies are influenced by current economic data and diverging economic outlooks.

Key Points:

EUR/USD Trading Strategy:

• Buy on Dips: Danske Bank recommends buying EUR/USD on dips in the near term. This strategy is influenced by the impact of weaker US economic data, suggesting potential upside in the EUR/USD pair.

EUR/GBP Trading Strategy:

• Range Trading Around 0.87: The bank suggests that EUR/GBP is likely to range trade around the 0.87 mark.
• Economic Outlook Triggers: Traders should be on the lookout for triggers in the pair, likely arising from diverging economic outlooks between the Eurozone and the UK.

USD/JPY Trading Strategy:

• Sell on Rallies: The recommendation for USD/JPY is to sell on rallies in the near term.
• Strategic Selling Opportunities: Active seeking of strategic selling opportunities is advised, aligning with the broader view that USD/JPY may face downward pressure.

Conclusion:

Danske Bank's near-term trading strategies for EUR/USD, EUR/GBP, and USD/JPY are tailored to current economic conditions and expected divergences in economic outlooks. The strategies include buying EUR/USD on dips due to weaker US data, range trading EUR/GBP around 0.87, and selling USD/JPY on rallies, with an emphasis on seeking strategic selling opportunities. These approaches reflect a nuanced understanding of the current forex market dynamics.