Societe Generale Cross Asset Strategy Research discusses EUR/USD outlook and notes that prices need to close above 1.1690 by the end of play tomorrow to avoid a fourth consecutive monthly fall - the longest run since the 9-month fall in 2014/2015.
"That said, if we close here, it will be a third monthly close within a 0.25% range, which tells its own story. CFTC data show that after a very sharp reduction in net long euro positions in May/June, these have stabilised. The last 2 months have also seen 10year yield differentials meander in a 10bp range, so the real problem is a lack of new macro drivers," SocGen argues.
"This week's candidates for that come in the form of Q2 Eurozone GDP tomorrow (we expect a 0.5% gain, as the soft patch recedes into the rear-view mirror) and the FOMC (where no-one expects a hike this week, but almost everyone expects one in September).
EUR/USD can react more to positive euro news now than to negative, and so we have a chance of getting to EUR/USD 1.1750 and above this week and making a move out of the current range in August," SocGen adds.