EUR/USD could rebound to 1.25 in 2018 – Danske Bank

In opinion of Jens Sorensen, Chief Analyst at Danske Bank, spot could visit the 1.25 handle in the next year.

Key Quotes

“Dips in EUR/USD could occur near term as the risk of USD support from a US tax reform and the relative cyclical position and policy cycle remain, and we still look for the 1.1479-1.1880 range to hold towards year end”.

“That said, we continue to stress that a 2018 rebound towards 1.25 is on the cards and that upside risks dominate the longer-term outlook. We now see the cross at 1.16 in 1M and 1.16 in 3M (previously 1.18)”.

“We keep our forecasts for the 12M horizon unchanged at 1.25 but lower the 6M forecast to 1.20 (previously 1.22) to reflect that the ECB has postponed the potential for ‘normalisation’ trades somewhat”.