EUR/USD: Establishing a new range – Danske Bank

Analyst, Mathias Røn Mogensen at Danske Bank, suggests that EUR/USD is establishing a new range of 1.21-1.26 in their view, in which to trade over coming months.

Key Quotes

“EUR/USD uptick is in our view set to be resumed in Q2 as commercial flow support kicks in (again) driven by a trough in euro inflation and ECB adjusting forward guidance more aggressively. We underline that a US spending bill is set to widen basis and strengthen the case for hedging USD assets/income in longer-dated forwards, but, for the near term, consider shorter-dated risk reversals as an alternative to hedging with forwards.”