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EUR/USD is trading well within recent and known ranges lately. What is the next move? Some suspect that the pair is basing and some even see it rebounding.

However, the team at BNP Paribas continue with their short position, and  provide some reasoning:

Here is their view, courtesy of eFXnews:

The USD continues to firm this week as the policy divergence theme was moved forward by dovish comments from ECB officials and the after-effects of the weak GDP readings in Japan, notes BNP Paribas.

“The US side of the equation, however, remains dormant, with US yields little changed at Friday’s low levels. Weaker than expected readings on the Empire manufacturing survey and October manufacturing production suggest a slow start to the quarter for US factory activity,” BNPP adds.

“Still, we expect data later this week to be more supportive, with core CPI likely to tick higher on Thursday, while Wednesday’s FOMC minutes are likely to be perceived as somewhat hawkish,” BNPP projects.

In line with this view, BNPP remains broadly bullish on the USD, and continue to run a short EUR/USD targeting a move to  1.18.

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