FXStreet (Edinburgh) - The recent price action in the pair would point to further consolidation ahead, suggested Allan von Mehren, Chief Analyst at Danske Bank.
“Today’s preliminary PMI releases from both the US and Europe are likely to confirm a divergent growth outlook between the two regions and emphasise that fundamentals are still moving in favour of the USD relative to the EUR”.
“However, with the Fed maintaining a soft rhetoric, EUR/USD is likely to stay stable for now”.
“According to the latest IMM data, non-commercial investors added to their short EUR in the week ending 17 June. Hence, speculative positioning in EUR/USD looks increasingly stretched which is a possible barrier for further near-term decline in EUR/USD”.
“Moreover, the stretched short euro positioning also implies that EUR/USD has become vulnerable to a correction”.