EUR/USD: Dollar correction faces resistance – Societe Generale

Societe Generale’s Kit Juckes notes a softer Dollar as Oil and bond yields edge lower and equities firm, with month-end flows likely in play. He highlights favourable conditions for a Dollar correction but warns that if EUR/USD cannot reclaim at least 1.14, the move will be seen as another opportunity to sell Euro, reinforcing negative sentiment from softer European data.

Key level caps Euro rebound

"If EUR/USD fails to move back above 1.14, at a minimum, this rebound will likely be widely viewed as another opportunity to sell the euro."

"Relative interest-rate differentials continue to move in the dollar's favour, while markets still price in three ECB rate hikes before the middle of next year."

"Is there really enough growth in the Eurozone to justify that?"

"It feels like an overreaction to a temporary inflation shock, albeit one that may persist as long as the energy crisis continues."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)