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EUR/USD remains in the uptrend channel, taking two steps forward and one backward. What’s next? Here are two opinions:

Here is their view, courtesy of eFXnews:

EUR: Investors To Play EUR Cautiously Till May-31; Dips In EUR/USD A Buy – Nordea

Nordea FX Strategy Research notes  an interesting pattern in Euro Area inflation data that could could have an implication on EUR trading through the end of May.

“EA core inflation surprised massively in April, rising to 1.2% and boosting EUR via ECB “Septaper” hopes. However, when we saw a fairly similar deviation vs the average seasonal pattern in 2016, half of that deviation was corrected the following month.

If half of April’s core inflation overshoot is corrected in May, markets will need to digest  core inflation at 0.9% on May 31.  This is one reason why market participants are likely to play the EUR cautiously until then.  If EA core inflation surprises to the upside, then the story of inflation convergence between EA and US is really alive – especially given the  new setback in US core inflation on Friday,”  Nordea notes.

Strategy-wise,  Nordea expects EUR/USD to range-trade in the near-term and keeps recommending  buying EUR/USD on any substantial dips.

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EUR: En-Route To Further Gains But Patience Needed; Where To Target? – CIBC

CIBC FX Strategy Research notes that the EUR has been relatively sagging following the French election as  some market participants point to the market concerns about France’s National Assembly ballot next month.

In that regard, CIBC note that  France’s 10-year yield spread to Germany, a measure of risk, remains low  post election, suggesting that sentiment hasn’t actually deteriorated.

“What’s more likely is that currency markets got a bit ahead of themselves recently. It’s still likely that the euro outperforms the dollar this year with the economy doing well, but  investors need to be patient,” CIBC argues.

CIBC targets EUR/USD at 1.10 by end of Q2, at 1.12 by end of Q3, and at 1.14 by end of the year.

EUR/USD is trading circa 1.0930 as of writing.