EUR/USD to rise towards 1.10 on a break past 1.0960 resistance – SocGen

EUR/USD stalls at 1.0960 hurdle. Economists at Société Générale analyze the pair’s outlook.

December seasonality bullish

Month-end equity portfolio rebalancing flows could renew EUR/USD buying interest this week and guide the pair back above 1.0960 resistance which stands in the way of a rise to 1.10.

Seasonality turns resolutely bullish Euro in December. The average gain of the last 10 years is 1.1%. Based on current spot, this would translate into 1.1050 for EUR/USD by year-end. 

The combination of China stimulus (housing/ foreign orders) and lower oil prices are supportive for higher EUR/USD so long as the bear steepening in US yields does not reignite.