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EUR/USD is moving gradually to the upside, but the pace is quite slow. What’s next? A lot depends on internal issues in the continent’s largest countries.

Here is their view, courtesy of eFXdata:

Barclays Research discusses EUR/USD outlook and adopts and  flags scope for upside in the near-term amid the release of the Italian and French budgets.

We believe that risk-reward favors EUR/USD upside, given limited risks from the Italian and French budgets,  and expected improvements in inflation prints. Italy is due to release an update to its medium-term economic and fiscal this week (by 27 September), and draft the 2019 budget by 15 October…,” Barclays argues.

“French budget will likely contain higher than previously projected public deficit and debt; however the focus will be on the government’s strategic plan to reduce public spending and structural deficit….A more constructive plan from the French budget will likely support the single currency,” Barclays adds.

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