FX Watch: Keep EURUSD Shorts This Summer

BofA maintains a bearish outlook on EURUSD, recommending short positions via put spreads. Technicals and fundamentals both point to further downside, mirroring trends from 2018.

Key Takeaways

• 1.Maintain short positions on EURUSD through the summer due to bearish technical patterns and economic divergence.
• 2.Technical indicators suggest a 'head and shoulders' top is forming, with breakdown levels providing downside targets.

Table of Contents

• Key takeaways
• View: Keep EURUSD shorts this summer
• Technicals: Euro broke support, bias is to fade bounces
• Fundamentals: relative data vs. geopolitical wish-casting
• EURUSD: Bearish trend line breakdown
• EURUSD: Head-and-shoulders top still forming
• DXY in 2024-2026 has been repeating 2016-2018
• Fundamentals: Relative data vs. geopolitical wish-casting
• Talk of Fed hikes getting louder, while durability of ECB hikes in question