Societe Generale Cross Asset Strategy Research argues that in the very near term, the EUR is vulnerable as the highly-anticipated ECB QE tapering announcement is behind us.
"The pieces are in place for a deeper euro correction but the longer-term fundamental case for a stronger euro also bears reiterating Economic growth momentum in the euro area is strong, and we see upside risks to growth next year. Bund yields are out of synch with that growth momentum and will help drag the euro higher in due course, towards is long-term fair value closer to USD 1.30.
"We’re looking to set strategic longs in EUR/USD a 1.15, while we don’t look for even that much of a fall in EUR/JPY where 130 probably won’t be broken before the move towards 140 resumes," SocGen advises.
Source: Societe Generale Cross Asset ResearchOriginal Article
