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Sep 12 - 02:55 PM

USD, EUR: Fade The Recent Price Actions - Danske

By eFXdata  —  Sep 12 - 01:30 PM

Danske Research likes to fade the recent price actions in USD and EUR. 

"With European markets and value sectors having a strong end to last week it was no surprise to see EUR, NOK and other "value" currencies perform very well at the expense of not least the USD. Technically, momentum-indicators suggest that the rally could extend. Short-term the global environment seems fundamentally supportive of a stronger NOK, SEK and EUR. That said, we are highly sceptical as to the longevity of the move and this morning we have even seen a slight reversal," Danske notes. 

"With public balance sheets seemingly set to cushion Europe from the energy shock - and hence keep real rates relatively depressed - the EUR FX will remain the pressure relief valve. The growth outlook remains bleak for the Eurozone and with central banks still firmly in front-loading panic mode it's rarely an environment where EUR, NOK and SEK rallies can be sustained. In sum, we will look to position for a reversal of recent price action," Danske adds. 

Source:
Danske Research/Market Commentary

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