Credit Suisse discusses EUR/USD tactical outlook and adopts a sell-on-rallies bias.
"Powell's seeming volte face wrong footed the rates market and aroused fear's that it might be 'one and done'. It is premature to conclude that, indeed Jay emphasized that that was not what he said, but we are certainly now in data watching mode. Our main conclusion is that it again indicates that the US has a lot more going for it in terms of growth, yield and investment opportunity," CS notes.
"As such we expect the USD to stay in the ascendancy, particularly against the EUR and look for the cross to dribble lower and ultimately break the 1.1000 support and target 1.0900. Any rally to 1.1070/80 should attract sellers and we don't expect to see us regain 1.1100," CS adds.