EUR/USD: More gains seen if Brexit deal passes Parliament – MUFG
|Lee Hardman, currency analyst at MUFG Bank, see the EUR/USD holding a bullish bias for next week. They see it trading in the 1.0950/1.1250 range.
Key Quotes:
“The euro has continued to strengthen modestly against the US dollar rising to its highest level since late August and moving further above the 1st October low at 1.0879. The next key resistance level for EUR/USD is provided by the 200-day moving average which comes in at 1.1212. The main fundamental driver for the stronger euro has been the paring back of No Deal Brexit risk. A last minute Brexit deal would help ease downside risks for the euro-zone economy and the euro. It has provided some welcome relief for the euro-zone economy given the current weak pace of growth.”
“All eyes will now be on the expected UK parliamentary vote on Saturday to see if the deal has sufficient support to pass. Without DUP support, the outcome from the vote will be a close call. For the euro to extend it advance at the start of next week will require the deal to be passed in parliament. Otherwise, it will correct back towards the 1.1000-level. The ECB is also set to meet in the week ahead. It will be President Draghi’s last meeting but is unlikely to be a market mover. The ECB set out its plans for monetary policy last month.”
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