EUR/USD returned above parity for first time since 20 September. Nonetheless, economists at Société Générale expect the pair to struggle to see further gains.

Not the end of the dollar rally, but the endgame has started

“The return of EUR/USD over parity yesterday for the first time since 20 September logically challenges the downtrend from 1.15 back in February.”

“But whilst another round of dollar profit taking cannot be ruled out after the ECB and before month-end on Monday, we think it is early days and there could still be merit in fading gains until we hear from the Fed next week.”

“A close above the 1.02 Fibo resistance level would have to be taken more seriously.”

“We still think Q4 is more likely to see choppy, directionless trading for EUR/USD and DXY than a clear turn in the trend, but we retain our view that the dollar’s rally is in its last stage.”