EUR/USD outlook stays constructive – TDS

Strategists at TD Securities noted the pair’s outlook now looks constructive on the longer term, specially after 1.1716 was cleared.

Key Quotes

“The noise-to-signal ratio in this report is not particularly appealing. Having said this however, we are focused on the average hourly earnings, which were positively revised”.

“This may leave the USD with some short-term lift but we struggle to see this report as a case to add to USD longs especially with the Fed nearly fully priced for December”.

“On this basis, if the USD can't strengthen further from here on what could be viewed as a constructively development on these measures (despite some distortion), then incremental strength may be harder to come by from here”.

“We advocate being patient but we are closely watching how EURUSD trades from here; a close above 1.1716 would begin to look constructive on the weekly chart and that the USD rebound may be long in the tooth – especially if 10yr yields fail to break through key levels near 2.40%”.