EUR/USD: Societe Generale believes a rise to 1.20 is more likely than a drop to 1.05

In an analysis note published this week, Société Générale is rather optimistic about the EUR/USD pair.

The bank considers that within 6-12 months, there is a greater likelihood that the pair will rise to 1.120 than fall to 1.05.

However, in the shorter term (1-3 months), the bank identifies several risks for the euro.

First of all, the decline of the yuan. SG explains that if the USD/CNY rises above 7, a return to the annual lows of the EUR/USD will be likely.

The fate of the euro is also to be linked to that of the British pound according to Société Générale, which believes that if the GBP/USD plunges again in the context of Brexit, the EUR/USD will also be significantly affected.