Danske Research opened a short EUR/USD position in its recommendation portfolio.

"Yesterday, we recommended a short EUR/USD spot position (with a target of 1.1100, stop-loss 1.1550), which admittedly did not get the best possible start after the US June CPI surprised to the downside on a broad basis (core CPI 2.6% y/y, cons. and Danske 2.8%). Core goods inflation recorded its second negative m/m reading in a row, while both housing and non-housing services inflation cooled as well. Markets erased most of the pricing for a July hike, and we maintain our base case for the first hike in December," Danske notes.

"Nevertheless, EUR/USD reversed most of its initial rise later on as Kevin Warsh underscored that the reading did not signal 'mission accomplished' for the Fed during his testimony for the House financial services committee. Goolsbee echoed Warsh's sentiment later by saying that he 'never wants to overreact to one month [of data]' even if the reading was 'surprisingly benign'," Danske adds.