Danske Research maintains a structural bearish bias on EUR/USD over the coming months, but hold less-conviction on EUR/USD tactical view in the near-term.

"The wide range of PMI releases yesterday failed to generate any bigger FX moves. While there were subtle differences as to where services and manufacturing indicators surprised to the topside and downside, respectively, the overall take-away was better-than-expected prints. This follows the signals from our quantitative business cycle indicators that suggest a much improved growth outlook - but importantly only for the near-term. The all important question for FX markets will be to what extent central banks can allow growth to pick up again amid elevated core inflation and tight labour markets," Danske notes. 

"The move higher in EUR/USD seems to have stalled and the coming weeks' ECB and Fed meetings could prove instrumental for the investment environment we will face in February. Our strategic bias clearly remains for a lower EUR/USD but admittedly, our tactical conviction is not high at this stage," Danske adds.