Credit Agricole: EUR/USD targets 1.3100
Credit Agricole sees upside risks for EUR/USD as we approach the year-end. Demand for the euro is expected to revive amid stabilizing ECB monetary policy expectations, elevated short positioning and as the risk asset related capital flow situation may turn more positive again.
This week analysts recommend watching November PMI figures. Further stabilizing business activity will likely keep the risk of further falling inflation expectations low. If so, analysts expect profit taking to trigger a further EUR correction higher.
Credit Agricole EUR/USD positioning: Hold LONG from 1.2660, Take Profit 1.3100, Stop Loss 1.2350