Euro Strengthens as Dollar Weakness Continues

Societe Generale strategists say the Euro has squeezed above key resistance against the US Dollar, thanks to the dollar's weakness following softer United States employment data and reduced odds of a September Federal Reserve hike.

The pair is trading near fair value based on 2-year spreads, but is slightly expensive relative to natural gas.

If the European Central Bank hikes again while the Fed pauses, EUR/USD could gain further, with the next resistance zone identified around 1.1610/1.1625.