The current consolidation phase of the EUR/USD might be broken downwards, according to the FX analysis team at Rabobank, which sees the pair pulling back towards 1.09 by year-end.
“Depending on whether the EU 27 can ratify the European Commission’s proposal for a recovery fund, it is possible that the fundamentals of the EUR have undergone a structural improvement that has helped to shift the trading range for EUR/USD higher.”
“Over the past month, the average rate for EUR/USD has been close to 1.1258. This compares with 1.1089 in the 3 months to the end of January. Whether this change is borne out dependents on the negotiations currently underway between European leaders and finance ministers.”
“That said, on the view that broad-based optimism about the extent of the recovery trade will falter in the months ahead, we continue to see scope for a dip back to the EUR/USD1.09 area by the end of the year.”
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