Danske Research discusses EUR/USD outlook and maintains a structural bearish bias over the coming months.
"We note that in tandem with EUR/USD loosing steam Eurozone equities are beginning to underperform US peers - and also more generally that value is beginning to underperform growth. In our view, this is an important development to follow when it comes to the direction of EUR/USD. As explained over the last weeks we still have a strategic bearish bias for EUR/USD even if our tactical conviction is less clear," Danske notes.
"To the extent central banks next week (primarily Fed, ECB) deliver a fairly firm hawkish guidance - especially when taking into account the last quarter's easing of financial conditions - we think a long USD position is beginning to look appealing again, perhaps even from a tactical perspective. Either way next week could prove pivotal for the global investment environment that will face us for the rest of February," Danske adds.