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EUR/USD still points southwards – TDS

FXStreet (Edinburgh) - According to strategists at TD Securities, the greenback remains poised for further appreciation in the next weeks, weighing on the pair.

Key Quotes

“The current economic landscape continues to favour EURUSD lower, and we now look for a move down below the March trough”.

“Importantly, however, we note that the next several weeks may represent the ‘easiest’ portion of this latest – and possibly terminal – phase of the USD rally”.

“The interval between Friday’s employment data, when a December hike became a near-certainty for many observers, and when that policy shift is actually delivered represents the clearest articulation of the bullish factors driving USD appreciation”.

“During these few weeks, we are only likely to see limited offsets from concerns about what the overall trajectory of Fed tightening is likely to look like after”.

“Only once the first hike is finally delivered do we think the accompanying policy message of a (very) cautious and gradual tightening cycle is likely to sink into the market’s collective consciousness”.

“At the same time, very concrete expectations for an aggressive easing by the ECB put a weaker EUR very much on the market’s agenda, but a similar dynamic is likely to emerge once they also take action”.

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