EUR/USD: Shifting to a more neutral bias next week - MUFG

MUFG on the outlook for the euro

MUFG Research discusses EUR/USD outlook and shifts tactically to a more neutral bias next week, expecting the pair to trade around 1.10501-1.1350 range.

"The potential for a restart of quantitative easing, a rate cut as large as 20bps, and the prospect of a tiering of deposits, should constrain a stronger euro. Further pressure on the euro could result from the building concern over a No Deal Brexit by the end of October and the heightened uncertainty leading up to that. These factors could be more supportive of the dollar and so we maintain our bearish EUR/USD bias," MUFG notes.

"Next week is very quiet data-wise with no obvious event-risks scheduled so while we remain bearish in general, a more neutral bias for the week ahead appears sensible," MUFG adds.

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