EUR/USD poised to reach 1.20 in medium term – Danske Bank

Chief Analyst at Danske Bank Christin Tuxen noted the pair is viewed around 1.2000 in a 6-month horizon.

Key Quotes

“Short term we think the USD positives (carry appeal of USD, an ECB on hold for an extended period, Italian debt risks) will dominate the longer-term EUR positive impulses stemming from valuation and a turn in capital flows. Specifically, we expect EUR/USD to trade broadly within the 1.15-1.21 range over the next 6M period”.

“But our medium-term story remains unchanged: the capital outflows of recent years will fade as we move closer to the first ECB hike. Alongside valuation, this is set to support EUR/USD in 6-12M”.

“We continue to see EUR/USD at 1.17 in 1M, 1.17 in 3M, 1.20 in 6M, and 1.25 in 12M”.