EUR/USD: knee-jerk expected ahead of further gains – Danske Bank

EUR/USD is seen declining in the near term, although a resumption of the upside is expected in a later stage, suggested Sverre Holbek, Senior Analyst at Danske Bank.

Key Quotes

“Focus has been on North Korea with the traditional safe havens of CHF and JPY benefitting. EUR/USD momentum has continued to fade which can be partly explained by rising North Korean risk”.

“However, the latest fall in EUR/USD should primarily be explained by long covering amid improving US data and expectations that Draghi will be dovish at Jackson Hole this month and the ECB meeting in September”.

“Note that our 1M and 3M EUR/USD forecasts are 1.17 before the next push higher further out”.