EUR/USD likely to stay between 1.10 – 1.14 – Danske

By FXStreet Analysts from Danske Bank expect EUR/USD to remain between 1.10 and 1.14 after yesterday’s FOMC dovish message to the markets.

Key Quotes:

“Needless to say, the surprisingly dovish message sent USD crosses lower across the board with EUR/USD testing new post-ECB highs above the 1.12 level. Indeed, this was not the day for the Fed repricing in a more hawkish direction we have otherwise been waiting for, and the bold reaction higher in EUR/USD is in our view clearly testament to the sensitivity in the cross being higher to USD-negative factors than the opposite in the present environment given that the cross is stretched on the downside on not least valuation measures; thus the boost to risk assets was not strong enough to drag the euro (nowadays more of a safe haven then USD) lower.”

“With the Fed set to deliver merely a September hike this year, in our view, the case for USD upside looks increasingly weak. What would it take for another firm dip below the 1.10 level then? In our view, this requires a new significant uptick in US money-market rates, which could, for example, be brought about if oil prices show more firm signs of stabilisation …read more

Source:: FX Street