EUR/USD: Room for rebound to extend – MUFG

EUR/USD: Room for rebound to extend – MUFG

Time Stamp: April 29, 2023 1:08 PM
Source Node: 2616899

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Analysts at MUFG Bank continue to see the EUR/USD pair moving to the upside over the next few days. They expect the pair to break out to the upside and move back closer to pre-Ukraine conflict levels from early last year.

Key quotes: 

“The pair has been attempting to break above the top of this year’s trading range between 1.0500 and 1.1000 over the past week, and has spent the most time trading above the 1.1000-level this month since March of last year. We expect the pair to break to out to the upside and move back closer to pre-Ukraine conflict levels from early last year. The fundamental drivers that have helped lift EUR/USD at the start of this year remain in place and have been reinforced recently.”

“The EUR is continuing to benefit from the easing of downside risks to growth in the euro-zone.”

“Renewed concerns over the health of First Republic Bank over the past week ahead of next week’s FOMC meeting makes us more confident that the Fed will deliver a more cautious policy update. We expect one final 25bps hike from the Fed next week and a signal that they are more seriously considering pausing their hiking cycle. The narrowing policy divergence between the ECB and Fed should help to keep lifting EUR/USD to fresh year to date highs.”
 

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