What's next for the euro
MUFG Research discusses EUR/USD tactical outlook and adopts a bearish bias going into next week ECB meeting, expecting the pair to trade downward in a 1.1350-1.1050 range.
"Next week could prove pivotal for euro direction. It has the potential to shake the euro out of its current tight trading against the US dollar. EUR/USD has consistently found support between the 1.1100 and 1.1200-levels for most of this year," MUFG notes.
"The main event in the week ahead will be the ECB's latest policy update. We expect the ECB to strike a more dovish policy tone and back it up by delivering a 0.20 point rate cut...In these circumstances, we judge that the balance of risks for the euro is skewed to the downside. The close proximity of the FOMC meeting at the end of the month could act as dampener on downside potential though," MUFG projects.
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