Nordea Research discusses EUR/USD outlook and keeps flagging long EUR/USD position as the second-best G-10 FX trade in months leading up to the ﬁrst Fed cut, only outpaced by a long EUR/NZD position.
"As we have shown in recent FX Weeklies, long EUR/USD is usually a super trade in the month heading into the first Fed cut. Only long EUR/NZD has a better track-record in to the first Fed cut.
ECB easing is also a done deal now, as Draghi hinted of easing unless the outlook improves (more QE and a rate cut). The outlook will not improve (before 2020), but the ECB usually delivers when projections are updated – i.e. in September (they will ease with a time-lag after the Fed)," Nordea notes.