EUR/USD: Stuck in a range between 1.06 and 1.10 this year – Rabobank
|In the year-to-date USD/JPY has traded in a mighty range that has stretched almost from 140 to 162. By contrast EUR/USD has been stuck between 1.06 and 1.10, Rabobank’s FX analyst Jane Foley notes.
Potential risks for a break higher coming from a softer USD
“The lack of strong direction in EUR/USD is despite a wealth of news that has included prolonged weakness in Germany’s manufacturing powerhouse, a shift to the far-right in European politics (most notably France) and a ratcheting up of budgetary concerns in a number of Eurozone countries. In the US, expectations regarding Fed policy have swung markedly during the year as recession fears have risen and fallen.”
“Additionally, US politics has been a market driver which promises to bring a lot more direction both in the approach to the November presidential election and once the outcome is known. In addition to these factors, the risk of a safe haven bid from a potential escalation in Middle Eastern tensions has hung over the greenback this year.”
“The ability of EUR/USD to soak up all this news and remain range bound suggests that more of the same may be on the cards in the months ahead. We have removed our EUR/USD1.05 3-month target mostly on the view that imminent Fed rate cuts are likely to prevent a dip to this level this year. We also weigh up the factors that could push the currency pair above EUR/USD1.10.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.