EUR/USD has been looking for a new direction for quite a few trading sessions.
Will it change? The team at BTMU sees a wider trading range and a clear bias:
Here is their view, courtesy of eFXnews:
The following is EUR/USD range and outlook for next week as provided by Bank of Tokyo-Mitsubishi (BTMU).
EUR/USD – BEARISH BIAS – (1.0650-1.1150)
We have widened the weekly trading range to highlight that the US dollar could prove more volatile in the week ahead.
The euro remains under downward pressure against the US dollar in the near-term amidst broad-based US dollar strength. The release late last week of the disappointing US employment cost report for Q2 had only a fleeting negative impact on the US dollar. Recent rhetoric from Fed officials have reiterated that a September rate hike remains in play and will depend on upcoming economic data releases especially on the labour market. The release tomorrow of the latest non-farm payrolls report will likely prove even more important than normal for US dollar direction in the near-term. We expect the report to reveal that employment growth remained solid in July expanding by around 200k which would move the Fed closer to raising interest rates and providing support for the US dollar.However, unless there is a significant surprise the report is unlikely to prove decisive in dictating whether the Fed will raise rates in September. Average hourly earnings growth will also be scrutinized more closely after the disappointing employment cost report. Average hourly earnings are already indicating more subdued wage growth.
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