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#1 15-05-2017 11:15:13

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2160

EUR/USD: Nordea says dips represent a buying opportunity through May

EUR/USD: Nordea says dips represent a buying opportunity through end of month

Nordea Forex Strategy Research notes an interesting pattern in Euro Area inflation data that could could have an implication on EUR trading through the end of May.

"Euro area core inflation surprised massively in April, rising to 1.2% and boosting EUR via ECB “Septaper” hopes. However, when we saw a fairly similar deviation vs the average seasonal pattern in 2016, half of that deviation was corrected the following month.

If half of April’s core inflation overshoot is corrected in May, markets will need to digest core inflation at 0.9% on May 31. This is one reason why market participants are likely to play the EUR cautiously until then. If Euro area core inflation surprises to the upside, then the story of inflation convergence between EA and US is really alive – especially given the new setback in US core inflation on Friday,
" Nordea notes.

Strategy-wise, Nordea expects the EUR/USD to range-trade in the near-term and keeps recommending buying the EUR/USD on any substantial dips.

The EUR/USD is trading around 1.0950 right now...

"Anything worth having is worth going for - all the way." - J.R. Ewing



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