EUR/USD: fade strength above 1.18 – Danske Bank
Allan von Mehren, Chief Analyst at Danske Bank, expects the pair to remain largely sidelined in the near term.
“EUR/USD was somewhat volatile yesterday as Merkel refused to resign after the break -down in coalition talks, and as Yellen said she would step down from the board once Powell takes over at the Fed”.
“We stressed that the cross should stay range bound ahead of year end (1.1479-1.1880) but that we would tactically consider selling on spikes above 1.18 for a move lower short term”.
“Today watch out for ECB’s Couere speaking; he has previously delivered very insightful speeches on notably euro-zone portfolio flows which we deem could become key next year when markets gear up for the next ‘wave’ of ECB ‘normalisation’.