The agency argues that the euro’s upside potential stays intact
Nomura says that whereas ECB policymakers expressing concern about euro energy might put short-term downward stress on the foreign money, it is going to be troublesome to change the upward pattern that’s already in place.
“General we stay lengthy EUR/USD in money because the drivers of greenback weak spot stay intact.”
Including that there are roughly 9 bps of ECB fee cuts priced in over the following 12 months already, so it is not as simple that the euro “can solely go decrease”.
Different components identified by the agency are the relative energy of the euro space financial system, which must be euro supportive, and US election uncertainty to weigh on the greenback.
Wanting on the EUR/USD chart proper now, issues are trying somewhat precarious because the pair is threatening to interrupt its current sample of upper highs, larger lows. Not solely that, there’s additionally the every day trendline help being referred to as into query.
A agency break below 1.1800 may facilitate extra promoting, particularly if the greenback sees extra inflows from the selloff in danger belongings, with the 1.1700 degree a key area for consumers to defend with a purpose to stop a probably sharper fall within the pair.
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