Danske Research discusses EUR/USD outlook and sees a scope that 1.12 might already be the high for 2020, while the low is yet to come.
"EUR/USD dropped to its lowest level since 2017, to the 1.08. This was underway over January and is due to a host of factors. Relative data surprises are part of it. But further, the hope for many was that Europe would pick up pace and outshine US financial assets as the former supposedly recovered in Q1. But this hope for Europe (and EM) outperforming the US never got going and turning positions into long EUR/USD is now the consensus story," Danek notes.
"As of now, the easiest way to get an uptick in EUR/USD is via visible Chinese easing or for the Fed to signal more rate cuts. But this remains elusive. In turn, we would not be surprised if 1.12 turns out to have been the high of 2020 in EUR/USD, whereas we have probably yet to see the low," Danske adds.