EUR/USD Outlook: Euro Expected to Remain Bullish, Focus on US Data
EUR/USD: Stuck In Range; Focus On Next Week's NFP The euro is expected to remain more stable against the US dollar in the week ahead after failing to break higher following the more dovish than expected FOMC meeting, says BTMU.
"The US dollar has been recovering from the initial sharp losses sustained in the aftermath of the FOMC meeting supported by more hawkish than expected comments from Fed officials over the last week. Fed officials have attempted to correct market expectations for Fed policy which became too dovish after the FOMC meeting.
The release of the latest PCE deflator and US employment reports in the week ahead will be important in determining whether the market continues to price in an increasing likelihood of the Fed resuming rate hikes in Q2 which would help the US dollar to rebound in the near-term.
Comments from Fed officials including Vice Chair Dudley will be watched closely as well. The tragic Brussels terrorist attacks have increased the perceived risk of Brexit which is weighing modestly on the euro given the potential for negative spill over effects on the rest of Europe," BTMU argues.
BTMU is neutral on EUR/USD around current levels seeing the pair trading in a 1.10-14 range in the near-term.
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The euro remains in a bullish trend and might continue higher in the coming days, despite not much EU data being on the agenda, but on the other hand, US figures might undermine the greenback further and send the pair to new cycle highs.
On Monday, the euro zone's current account for January will be published, with German Ifo and ZEW surveys for March due on Tuesday. These might cause some reaction on the EUR/USD pair.
Thursday will bring flash manufacturing and services PMIs for March across the euro zone while Italian retail sales will also be published. There are no European numbers due on Friday as markets will stay closed for the Good Friday holiday.
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