EUR/USD forecasts revised lower – Danske Bank

Chief Strategist at Danske Bank Valtteri Ahti re-assessed the prospects for the par in the next months.

Key Quotes

“In the majors, EUR/USD slid below the 1.19 level yesterday, and while we have for some time been pointing towards the case for near-term USD strength, we have now opted to revise lower our 1M, 3M and 6M forecasts to 1.18 (1.23 previously), 1.19 (1.23 previously) and 1.23 (1.25 previously), respectively”.

“Notably, we think the 1.17 level could be revisited short term as relative rates and equity flows could be key channels for fuelling USD strength in 1-3M; crucially, we expect good support around the Dec-17 low of 1.1718”.

“We maintain, however, that the next big move in the cross is higher as a continued ECB exit fuels a capital return to the eurozone; we still target 1.28 in 12M (forecast unchanged)”.