EUR/USD to drift lower from 1.10, scope for further downside pressure into the spring – Rabobank

EUR/USD maintains the positive tone and trades near its weekly high around the 1.10 figure. Economists at Rabobank expect the pair to reverse back lower from this level.

USD is unlikely to give up too much ground

“The recovery in EUR/USD this week puts the 1.10 level back in view. Given the disorder in various commodity prices, demand for alternative energy and food supplies and the USD’s role as the dominant currency in the global payments system, we would USD buyers to step in at this level.” 

“We recently revised down our one-month EUR/USD forecast to the 1.06 area close to the lows of 2020 to reflect the risk that the crisis has the potential to bring more pressure on European economies.”

“We also see scope for increased volatility in the weeks ahead.”