EUR/USD: Preference for longs currently, given accelerating activity in Euro area – Goldman Sachs

The latest report from Goldman Sachs reiterated their bullish bias for the EUR/USD pair amid pick-up in the regional activity and downbeat catalysts suggesting further US dollar weakness.

The US bank said, “Our economists do not expect the FOMC to materially revise its outlook based on the recent inflation news, both because the committee will likely view the surge in prices as transitory and because this is the conventional way developed market central banks respond to the policy tradeoffs created by a supply shock.”

Also on the same line were statements like, “The worse-than-expected April employment report should reinforce the case for patience. With the Fed firmly on hold, we do not think higher inflation will support the Dollar, and we continue to forecast broad depreciation (with a preference for EUR/USD longs currently, given accelerating activity in the Euro area).”

Read: EUR/USD settles above 1.2200, focus shifts to EU inflation data