Back
27 Feb 2013
Forex Flash: EUR/USD sell-off would lose impetus – Danske Bank
The bloc currency has regained the 1.3100 mark on Wednesday, after positive data from the US on Tuesday and a strong defence of the ongoing QE programme by Chief Bernanke prompted investors to reposition on risk associated assets.
According to Chief Analyst A.Lohman Rasmussen at Danske Bank, the recent readings of oversold levels in the cross would be exaggerated, and he would recommend investors to “start gradually building EUR/USD longs and increase USD assets/income hedges”.
“In general, we argue that we would need to see a more significant bear market in risk assets or a more pronounced sell-off on the European sovereign bond market for EUR/USD to correct much below 1.30 and towards 1.25”, concluded the analyst.
According to Chief Analyst A.Lohman Rasmussen at Danske Bank, the recent readings of oversold levels in the cross would be exaggerated, and he would recommend investors to “start gradually building EUR/USD longs and increase USD assets/income hedges”.
“In general, we argue that we would need to see a more significant bear market in risk assets or a more pronounced sell-off on the European sovereign bond market for EUR/USD to correct much below 1.30 and towards 1.25”, concluded the analyst.