Is EUR/USD In A “Buy The Dips” Mode?

EUR/USD is stuck in range, in the middle of the 1.17 handle. What’s next? Here are three opinions, which lean towards buying the dips.

Here is their view, courtesy of eFXnews:

EUR/USD: Where To Buy Dips? – SocGen

Societe Generale Cross Asset Strategy Research expects EUR/USD dips-buyers to emerge on further move towards 1.1720 ahead of the key support around 1.1660/18.

“As for EUR/USD, it’s still backing off the major resistance line it failed at (1.1880) and still above support at 1.1720, let alone the 1.1660 level that is a clearer line in the sand for any dip-buyers.

….The pair is evolving within a Head and Shoulders pattern. Short term, it has approached towards previous highs of 1.1660/18. This is a near term support,” SocGen notes.

EUR/USD: Dips To Remain Shallow & Likely Limited To 1.1660 – Danske

Danske Bank FX Strategy Research maintains the view that any dips in EUR/USD should be shallow and short-lived as fundamentals still provide support and as notably a reversal in debt flows is a key source of upside risks for the cross.

“We see EUR/USD around current levels on a 1-3M horizon but stress that risks are on the downside in the very near term with a key risk being the appointment of a more hawkish Fed Chair.

That said, we do not think EUR/USD has the potential to drop much further with 1.1660 (17 August low) a key support level,” Danske argues.

EUR/USD: 1.15-1.1650 To Contain Any Exaggerated Pullback Into Next Week’s ECB Meeting – NAB

NAB FX Strategy Research sees the outcome of the ECB meeting underpinning the EUR expecting the 1.15-1.1650 area in EUR/USD to contain any exaggerated pullback.

“One key driver of the recent improvement in the USD index – US tax cut optimism – has since gone into reverse.

It will need to find fresh succour, alongside support for Fed chair Yellen’s apparent confidence in pushing on with rate rises come December, notwithstanding latest CPI, if the Euro-centric DXY is to avoid a re-visit to multi-year lows,” NAB adds.