UBS has raised its EUR/USD price target to 1.20 and lifted its stop-loss to 1.15, reiterating a long position it first recommended in mid-July. The bank points to diverging paths at the Federal Reserve and the European Central Bank as the driver behind its more bullish call.
UBS raised its EUR/USD price target to 1.20 from 1.17 and lifted its stop-loss to 1.15 from 1.13, reiterating a long position on the pair first recommended on July 16 at 1.1460.
US economic data have cast doubt on potential US rate hikes, UBS said, while European releases have shown more strength than markets previously anticipated. The bank believes the Fed will keep rates steady in September, closing the window for potential tightening, while the European Central Bank is likely to deliver a hike.
Markets are now pricing out Fed rate hikes, UBS said, and European data remain supported by fiscal easing. As a result, the bank expects EUR/USD to gradually trend higher.
Source: Investing.com
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