EUR/USD had its time in the sun, but this may be getting close to an end.
The team at BTMU looks at rising volatility and remains bearish:
Here is their view, courtesy of eFXnews:
Given the high level of volatility over the last week, BTMU is widening its EUR/USD range for the week ahead given the prospect of additional volatility. BTMU maintains a bearish bias on the pair sees it trading in a 1.10-1.15 rage over the coming week.
“Equity markets have rebounded and hence perhaps we should expect conditions to improve but there remains a high risk of further near-term volatility, which would no doubt lead to further euro short liquidation and result in EUR/USD moving to the top of our suggested range. However, if today’s more favourable conditions persist, then we will slowly see investors revert their focus back on to incoming economic data from the US ahead of the FOMC meeting on 16th/17th September,” BTMU argues.
“Our sense now is that even if conditions continue to improve, the FOMC will likely take the cautious route of maintaining its current policy stance. The ADP employment report will be released in the week ahead, it is likely to show average growth in jobs of around 200k – enough to reassure the market but not strengthen considerably the case for the Fed having to discard caution and hike in September. Still, more favourable economic conditions and data that points to the justification for a rate increase either in October or December should be enough to see the return of EUR/USD sellers,” BTMU adds.
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