EUR/USD made a new cycle high and ran out of energy, after three months of strong gains. In the opinion of Kit Juckes, Chief Global FX Strategist at Société Générale, Euro is a buy on dips barring new geopolitical developments.

It may be a dull day

“Were it not for the war in Ukraine on Europe’s inflation/growth trade-off, public finances and terms of trade; EUR/USD should now be a clear uptrend and ‘ought’ to be nearer 1.20.”

“Both the direct economic impact of the war and the negative effects on confidence of exposing European energy dependency matter, of course. But, if the impact of the war doesn’t increase (or go away completely), our rates forecasts justify another four figures or so of gains for EUR/USD this year (consistent with our EUR/USD 1.12 end-year forecast).” 

“It may be a dull day, but the Euro is a buy on dips and the Dollar a sell on rallies, barring new geopolitical; developments.”