Search ForexCrunch

EUR/USD is trading at the 1.12 handle, down from levels seen recently. The team at BTMU sees a loss of momentum for the pair and lays out the outlook.

Here is their view, courtesy of eFXnews:

The euro’s attempt to break higher against the US dollar following the more dovish policy signal form the Fed has failed in the near-term, notes BTMU.

As a result  EUR/USD continues to remain range bound. It is consistent with the signal from our short-term valuation models whose estimates for EUR/USD have remained relatively stable in line with the pair’s average over the last year at around the 1.1100-level.

We continue to view the risks as more skewed to the downside in the coming months ahead of the EU referendum  as heightened uncertainty over potential negative spillovers from Brexit for the rest of Europe should begin to weigh more on the euro,” BTMU argues.

“However, the US dollar continues to remain on a softer footing more broadly which is unlikely to change materially in the near-term. The latest economic data releases from the US have reinforced expectations that the economy expanded weakly in Q1.

We are not expecting any significant policy announcement from the ECB at their upcoming meeting who are likely to reiterate cautious optimism that recently announced easing measures will prove effective at lifting inflation,” BTMU adds.

BTMU is neutral on EUR/USD around current levels seeing the pair trading in a 1.1050-1.1450 range.    

For lots  more FX trades from major banks, sign up to eFXplus

By signing up to eFXplus via the link above, you are directly supporting  Forex Crunch.