By eFXdata — Jun 29 - 08:30 AM
Societie Generale Research discusses EUR/USD technical outlook and flags a scope for a break higher over the coming weeks.
"If you're a euro bull and want to keep your cup firmly half -full, the 50-day moving average of EUR/USD is above the 200-day for the first tie since the euro broke down in 211018. The last time it broke up through the 200-day average back in May 2017, it was a green light to go long. For the 2-years before that move, there were plenty of false signals from this indicator as EUR/USD bumped along the bottom of the ECB'-induced range, but relative growth expectations have settled at better levels than they started the year, while relative rates/yields have moved decisively in the euro's favour and peripheral European spreads continue to trend tighter," SocGen notes.
"Our base case assumption of the euro is that it spends pretty, much the rest of this year in a range, Consolidating before a move higher in 2021. For this week, after the dollar saw some month-end demand into the end of last week, the divergence between risk sentiment and dollar trend initially just looks like a reaction to that. But the longer the euro can remain in the current 1.1160-1.14 range the more positive the longer-term outlook," SocGen adds.
Société Générale Research/Market Commentary