EUR/USD risks point to further downside – Danske Bank

Thomas Harr, Global Head of FICC Research at Dasnke Bank, sees the pair is poised for further pullbacks.

Key Quotes

“EUR/USD reached a temporary peak on 3 May above 1.16 but has since edged lower”.

“We believe that the risks are to the downside near term. First, positioning is now much more clean than it was earlier in the year”.

“Second, we believe that the market is too negative on the US economy”.

“Third, we believe that Brexit risks will weigh on EUR/USD up to the referendum on 23 June. Our base case remains that the UK stays in the EU but we do not believe a ‘remain’ vote would lead to a significant EUR/USD rally”.