Danske Research maintains a bearish bias on EUR/USD through Q1 of 2022.
"Central banks take stage this week as Fed (Wednesday), SNB (Thursday), NB (Thursday) and ECB (Thursday), Russia and Turkey are set to speak. We expect market themes to continue being supportive of a lower EUR/USD on 1) cross asset rotation towards financial resilience and, 2) monetary divergence between US and Europe," Danske notes.
"For FX, we expect these trends to continue going in to Q1 and tracking the (relative) performance in this cross-asset theme will be much more important than the CB pricing itself. We suspect USD is set to strengthen further," Danske adds.