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EUR/USD is gathering upside steam as the improving outlook for growth outside of the US has helped to support risk assets and weighed on the US dollar more broadly. Economists at MUFG Bank expect the USD to be sold off if the pair reaches the 1.1495 March high.

Key quotes

“After failing to break back below the 1.1200-level in recent weeks, EUR/USD has rebounded and reached its highest level overnight since 11th June. The pair could now test the top of its current trading range between 1.1200 and 1.1400.” 

“A break above the high from 10th June at 1.1422 and then 9th March high at 1.1495 would open the door for a more significant US dollar sell-off.” 

“The US dollar remains vulnerable to further weakness as crisis conditions continue to ease. Real yields in the US continue to fall more than in other G10 economies and that is not yet fully reflected in the value of the US dollar.”