TD FX Strategy Research doesn't expect much upside in EUR/USD on a Macro victory in the second round of the French election on Sunday arguing that markets have already largely discounted such an outcome.
On the valuation front, TD notes that its tracking model of the cyclical drivers shows the EUR is the most expensive currency in the majors as it's implied EURUSD level is a touch below 1.08.
"This keeps cautious about chasing the rally into the weekend and look to fade near-term strength, as the potential for a squeeze increase," TD argues.
Near-term, TD looks for EUR/USD to hold the 1.07/1.10 range and looks to scale back in on dips.
EUR/USD is trading circa 1.0997 as of writing.
