The Societe Generale Analysis Crew supply its outlook on EUR/USD for the primary quarter of 2021, barely bearish within the near-term.
“Basic market drivers have not modified, however positions have been crowded.
If we are able to now scale back extra greenback shorts, then we’re setting the stage for a couple of extra very messy days earlier than underlying tendencies reassert themselves.
Our Q1 EUR/USD forecast (1.20) not appears to be like outdated, and we hope that stage will present a base for this transfer.
The important thing points occurring from right here could also be:
1) Can the ECB efficiently discuss the euro down, and
2) Does relative development mater in FX (not simply in EUR/USD).”