Synopsis:

Goldman Sachs favors a tactical approach to buying EUR/USD on dips, with a focus on broader USD weakness driving the pair higher despite a lack of strong economic support for the euro.

Key Points:

• Tactical Buy Levels:

  • Traders are looking to add to EUR/USD positions on dips back towards 1.1030, with a target of reaching the 2023 highs just below 1.1140.

• Market Sentiment:

  • The strategy is driven by expectations of broader USD weakness rather than strong economic fundamentals in the eurozone.

• Downside Risks:

  • A significant downside surprise in Thursday's European PMIs could challenge this outlook, though Goldman Sachs does not expect such an outcome.

Conclusion:

Goldman Sachs recommends a tactical approach to buying EUR/USD on dips, capitalizing on broader USD weakness, with an initial focus on 1.1030 as a buying level and a target of 1.1140.