EUR/USD: Failing To Break Current Range; Staying Bullish Next Week - BTMU

The euro has stabilized against the US dollar at higher levels over the last week, while US dollar has held up better than expected in the face of still broad-based selling pressure triggered by the more dovish policy shift from the Fed, notes BTMU.

"As a result, EUR/USD has failed to break above the top of current trading range between the 1.1000 and 1.1500 levels.

We expect the US dollar to remain on the defensive in the near-term although there are signs that weakness may already have overshot helping to limit scope for further downside.

The main focus in the week ahead will be the latest US retail sales and CPI reports, and comments from a number of Fed officials. A pick up in US growth in Q2 and more sustained evidence that inflation has firmed are needed to offer greater support for the US dollar.

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In contrast, the main downside risk for the euro in the current quarter is posed by the building risk of Brexit which should intensify in the coming months beginning to weigh more on the euro," BTMU argues. 

BTMU is bullish on EUR/USD going into next week seeing the pair trading in a 1.12-1.15 range.