Strategists at Societe Generale point out that EUR/USD has pushed above important barrier as dollar depreciation followed weaker US job statistics and fewer chances of a September Fed rise. On 2-year spreads, the pair is perceived as being close to fair value but significantly more expensive than nat gas. They point out that EUR/USD could rise further if the Federal Reserve (Fed) stops and the European Central Bank (ECB) increases once more. The next resistance zone is located between 1.1610 and 1.1625.
As Fed bets are repriced, Euro prospects strengthen.
"After the coordinated FX intervention in USD/JPY and the squeeze in EUR/USD above major resistance around 1.1475/1.15, clouds first emerged on the horizon for the dollar two weeks ago."
"The September rise pricing has been reduced to less than 50% from 72% at the end of July."
"The employment situation cast the Fed outlook in a different perspective and raises doubts for the path of the bond and FX markets in 2H after months of stressing about above target CPI and PCE inflation and leveling charges of being behind the curve."
"The pair is slightly more expensive than nat gas, but it trades close to fair value based on 2y spreads."
"There will be opportunities for a stronger EUR/USD in the future if the ECB increases again and the Fed does nothing due to the declining labor market."
"We see the next hurdle at 1.1610/1.1625."
As Fed bets are repriced, Euro prospects strengthen.
"After the coordinated FX intervention in USD/JPY and the squeeze in EUR/USD above major resistance around 1.1475/1.15, clouds first emerged on the horizon for the dollar two weeks ago."
"The September rise pricing has been reduced to less than 50% from 72% at the end of July."
"The employment situation cast the Fed outlook in a different perspective and raises doubts for the path of the bond and FX markets in 2H after months of stressing about above target CPI and PCE inflation and leveling charges of being behind the curve."
"The pair is slightly more expensive than nat gas, but it trades close to fair value based on 2y spreads."
"There will be opportunities for a stronger EUR/USD in the future if the ECB increases again and the Fed does nothing due to the declining labor market."
"We see the next hurdle at 1.1610/1.1625."
