EUR/USD: Bearish Bias Amid US Dollar Rebound - MUFG
Analysts from The Bank of Tokyo-Mitsubishi UFJ, point out that the bias for the next week in EUR/USD is bearish with a US dollar rebound underway in the market. They expect the pair to trade between 1.1050 and 1.1450.
Key Quotes:
“The euro has started to grind lower against the US dollar over the last
week moving closer towards the bottom of 1.1200 to 1.1600 trading range
which has remained in place over the last couple of months. A
broad-based rebound for the US dollar after the heavy sell off earlier
this year is increasing downward pressure on EUR/USD in the near-term.
The US dollar is deriving support from building expectations that the
Fed will resume rate hikes this year.”
“Absent a negative external shock (Brexit) and/or sharp tightening in US
financial conditions, we expect the Fed to soon resume gradual rate
hikes offering more support for the US dollar. If Fed rate hike
expectations also prompt more risk-averse trading conditions in the week
ahead it will offer some support for the euro.
“In Europe the main focus will be the upcoming euro-zone finance
ministers’ meeting at which potential debt relief measures and the
extension of financial support for Greece will be under discussion,
although the impact on the euro should be limited.”
