EUR/USD faces potential downside pressure – Danske Bank

Senior Analyst at Danske Bank Sverre Holbek sees risks of further pullbacks in spot in the near term.

Key Quotes

“It has been calm before the storm for EUR/USD this week with the pair trading in a close range around the 1.12 level”.

“We look for a more hawkish Fed today determined to push ahead with both rate hikes and balance sheet reduction to renew near-term downwards pressure on EUR/USD and look for the pair to fall towards the bottom of the 1.08-1.13 range on 3M”.

“We remain tactically short the pair in the Danske FX Trading Portfolio and target EUR/USD at 1.09 in 3M. That said, we still see levels below 1.10 as attractive for positioning for a renewed uptick towards the end of the year”.