EUR/USD: Bearish bias amid US dollar rebound – MUFG

By FXStreet Analysts from The Bank of Tokyo-Mitsubishi UFJ, point out that the bias for the next week in EUR/USD is bearish with a US dollar rebound underway in the market. They expect the pair to trade between 1.1050 and 1.1450.

Key Quotes:

“The euro has started to grind lower against the US dollar over the last week moving closer towards the bottom of 1.1200 to 1.1600 trading range which has remained in place over the last couple of months. A broad-based rebound for the US dollar after the heavy sell off earlier this year is increasing downward pressure on EUR/USD in the near-term. The US dollar is deriving support from building expectations that the Fed will resume rate hikes this year.”

“Absent a negative external shock (Brexit) and/or sharp tightening in US financial conditions, we expect the Fed to soon resume gradual rate hikes offering more support for the US dollar. If Fed rate hike expectations also prompt more risk-averse trading conditions in the week ahead it will offer some support for the euro.

“In Europe the main focus will be the upcoming euro-zone finance ministers’ meeting at which potential debt relief measures and the extension of financial support for Greece will …read more

Source:: FX Street