Is Euro / dollar back on the road to parity? | Danske Bank certainly thinks so

After the start of the US session yesterday the EURUSD pair sliced fairly neatly through the support level we had identified in the 1.07 region. The next level of meaningful support, from the Technical Analysis (TA) standpoint, is at or near 1.05.

It looks very much like the minutes of the FOMC meeting, which were released almost 24 hours earlier, finally received sufficient analysis from the market movers to bring them to the viewpoint that interest rates will rise in the US around the middle of this year.

Danske Bank certainly thinks so

According to a note from the traders at Danske Bank, which you can read here, they are of the opinion that Euro parity with the US dollar will be reached within six months. They take the view that rate rises in the US are only a matter of when, not if, and that they should start to be priced in from now. They target a 1.005 (yes that is two zeroes after the decimal point) exchange rate.

Apart from the good things that are expected to come out of the US to support the dollar, the Danske Bank traders are also of the opinion that we have not had anything like the final word from Greece, to trample down the Euro. They see the Hellenic Republic as being “…an omnipresent concern for the Eurozone”.