EUR: L/T Constructive But Elevated Positioning Points To Correction S/T – Credit Agricole

Credit Agricole CIB FX Strategy Research notes that it will be quiet in terms of EUR top tier data releases but notes that ECB members will continue to do their utmost to prevent monetary policy expectations from rising too fast.

"This is especially true as it is unclear whether growth momentum is strong enough in order to compensate for a stronger currency’s dampening impact on price expectations," CACIB adds.

"However, from a broader angle, a shift towards a less accommodative stance seems inevitable and such prospects should lay a floor below the single currency. While elevated long positioning may still pose some downside risks, we believe the EUR’s longer-term outlook is a constructive one," CACIB argues.

Source: Credit Agricole CIB ResearchOriginal Article