EUR/USD is still attempting to break higher but continues to fail which is sending a tentative technical signal that the pair maybe in the process of topping out in the near-term, notes BTMU.
"It fits with our fundamental view that downside risks are gradually building although are not yet compelling for us to adopt a bearish bias.
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The ECB’s policy announcement was neutral for the euro reiterating mainly the same message as at their last meeting in March. President Draghi predictably sounded optimistic that the ECB’s new easing measures will prove effective, and attempted to dampen any expectations that the ECB is considering helicopter money. Even for the ECB the likelihood of implementing helicopter money remains far-fetched in the near-term which should be no real surprise to most market participants. More interestingly, we noted a stronger message from President Draghi that the ECB is willing to ease policy further if there is an unwanted tightening in monetary conditions," BTMU adds.
"The focus in the week ahead will shift to the upcoming FOMC meeting. Similar to the ECB, the Fed is likely to present a largely unchanged policy stance offering little support for the US dollar.
However, as the market is now pricing such little Fed tightening it would appear the risks are more skewed to the upside for the US dollar," BTMU projects.
BTMU is neutral on EUR/USD around current levels.
