EUR/USD looks oversold, but could advance further – Danske Bank

Aila Mihr, Analyst at Danske Bank, expects the upside bias in the pair to extend longer for the time being.

Key Quotes

“EUR/USD continued higher yesterday driven partly by continued EUR demand as focus is turning to the cyclical outperformance and European political risks declining”.

“Meanwhile, the USD is losing its shine due to the recent developments in US politics. Hence, while EUR/USD looks increasingly oversold from a technical point of view, we think the cross might have further legs in coming days, as it appears that speculators could still jump on the bandwagon of long EURs and short USDs”.

“However, as the eurozone will not be immune to a likely turn in global cyclical and as the ECB is likely to stay dovish with EUR rising at its current speed, rising headwinds to the EUR may occur a little further out”.