Further Gains in EUR/USD Would be a Blow to the ECB - Rabobank
Further Gains in EUR/USD Would be a Blow to the ECB - Rabobank
Piotr Matys, EM FX Strategist at Rabobank, suggests that after fairly
volatile March, EUR/USD has been trading in a relatively narrow range so
far this month.
Key Quotes
“While the
price action hasn’t been particularly inspiring since the beginning of
April, it is worth pointing out that a sustainable trade above the
1.1340~ pivot keeps the short-term bias skewed to the upside with the
October high at 1.1495 as the key level to watch as a break higher would
be a constructive signal.
Although further gains in EUR/USD
would be a blow to the ECB due to persistently low inflation, it could
be an opportunity to establish fresh short EUR/USD positions.
In
our view the market is too bearish about the Fed currently expecting no
hikes at all this year. In the meantime, Rabobank’s Fed watcher Philip
Marey maintains his view that the Fed may raise rates on June 15. A
shift in market expectations in favour of a hike (triggered by more
hawkish rhetoric at the April 26-27 meeting perhaps) could reignite the
downside pressure on EUR/USD.”
(Market News Provided by FXstreet)
