Eurusd Will Slide Danske

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Eurusd Will Slide Danske

EUR/USD Will Slide To 1.12 - Danske

Danske Bank has set a new 12-month target for the EUR/USD pair. The bank forecasts the pair will slide towards 1.12 in the next 12 months.

Overall, that's a bearish forecast from Danske and shows the Euro is set to face multiple challenges. The bank added that credit supply and the fundamentals will support Dollar gains in the medium term.

US Economy Is Highly Resilient

Also, the economic data coming out of the USA shows the economy is highly resilient. Danske added that the upcoming data will further boost the demand for the greenback.

Also, the US Treasury policy regarding debt issuance will be USD positive. The bank thinks the policies will boost credit in the US economy.

Also, there is a wave of deregulation seen in the US banking sector. This will lead to a lot of new loans being issued. While it causes problems in the long run, it will definitely fuel economic growth in the short to medium term.

Danske also thinks the US Federal Reserve will have to make some changes. They expect the US central bank to raise rates in December 2026. After that, Danske forecasts the next rate hike will happen in March.

A natural reaction to higher rates will improve the appeal of the US Dollar against the Euro and other currencies. The bank also expects a net capital inflow towards the USD against the Euro.

Overall, it appears that the forecast from Danske is based on credit and expectations of rate hikes. If any of these are removed from the equation, then the EUR/USD pair may not fall at all.

On the way down, 1.13 is solid support, followed by 1.12. Below that, the next strong support is 1.10. For now, Danske Bank's forecast shows that 1.12 support is likely to hold the Euro sellers for now.

Also, geopolitics remains a big drag on the US Dollar. So, there's also a chance that something new could invalidate this forecast from the Danske Bank.

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