EUR/USD: Hard to see a range breakout next week – MUFG

By FXStreet According to analysts from The Bank of Tokyo-Mitsubishi UFJ, next week FOMC minutes poses some upside risk for the US dollar but the EUR/USD 1.12 – 1.16 range is likely to prevail.

Key Quotes:

“The euro continues to remain stable against the US dollar having traded within a narrow range between 1.1200 and 1.1600 over the last couple of months. It is hard to see the current range breaking in the week ahead.”

“Downside risks for the US dollar have eased after weakness overshot in the near-term. Recent economic data appears consistent with a pick-up in US growth in Q2 but is not strong enough yet to encourage expectations that the Fed will resume rate hikes as soon as in June.”

“Softer employment growth in April is helping to dampen Fed rate hike expectations. The release of the latest FOMC minutes should be less dovish signalling reduced concern over downside risks from global and financial developments compared to in March. With the market already pricing almost no probability of a rate hike in June, the risks are skewed to the upside for the US dollar from the minutes.”

“The latest CPI report for April will also be watched closely to assess if …read more

Source:: FX Street