EUR/USD: Strong US economic data to cause another leg lower – Rabobank
|Currently EUR/USD is sitting just above the 200-day sma, which is positioned close to 1.19. How treasury yields react to this week’s supply and to key US data releases will undoubtedly provide direction for the USD in the near-term, Jane Foley, Senior FX Strategist at Rabobank, briefs.
The release of US March CPI inflation data is scheduled on Tuesday
“CPI inflation is also set to push higher in March, with the Bloomberg consensus for the headline number standing at 2.5% YoY. Headline data will be lifted by stronger commodity processes led by energy. The Fed is likely to continue referring to this strength as transitory. However, a strong print may re-invigorate inflation fears and lend support to the USD.”
“Due to a second round of stimulus cheques, economists are expecting a healthy bounce for March retail sales. On the basis of the range of estimates for this release, there has to be reasonable risk of an upside surprise for retail sales which could feed support for the greenback in the coming days.”
“On strong economic data/higher yields this week, we see scope for another test lower for EUR/USD.”
“We expect EUR/USD to trade choppily in a 1.17 to 1.20 range in the months ahead.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.