Societe Generale Cross Asset Strategy Research discusses EUR/USD outlook, and sees a scope of further tactical weakness before dips-buyers emerge. Structurally, SocGen remains bullish on the cross in the medium-term.
"There are too many euro longs that still need to get flushed and with the risk of fresh election in Italy growing, the euro can slip further.
With Fed policy on a steady, predictable path and speculators short of longer-dated Treasuries, we can't really see much to boost the dollar, other than the nervousness ahead of the President's comments. Indeed, with strong Chinese trade data proving further support for the idea that a Q1 economic soft patch may be behind us, there's a good chance we return to yield-hunting once we get USD and EUR positioning sorted out," SocGen argues.