Societe Generale on EUR/USD
Societe Generale Cross Asset Strategy Research argues that around it is impossible to chart EUR/USD around current levels without noticing that the recent strength is looking overdone.
«The image we have used over and over again is of the ECB holding it down with easy monetary policy as a child might hold a ball down at the bottom of a swimming pool. Once released, a rapid rise is inevitable. But now that we have seen that rise lose momentum, there is more chance of a period of consolidation. Our end-year target is 1.18, our end-2018 target 1.27. For tactical euro bears, it’s now, or never,» SocGen argues.
On the technical front, SocGen notes that EUR/USD has achieved the initial objective at 1.2070 which corresponds to 2012 lows.
«In light of weekly indicators which are at graphical ceiling; a near term reaction looks on cards. Previous highs of 1.1714/1.1618 will be near term support levels. A move beyond 1.2070 is essential for next leg of uptrend,» SocGen adds.
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