EUR/USD: upside momentum but only modest bullish bias - BTMU

Analysts from The Bank of Tokyo-Mitsubishi UFJ, see a limited bullish outlook for the EUR/USD pair for next week. They expect it to trade between 1.0450 and 1.0800. 

Key Quotes: 

“There are no obvious risk events to focus on in the week ahead and hence our inclination is to give the current momentum greater influence in the bias for the week ahead. We don’t really agree with selling the dollar on the back of the FOMC minutes but the softer dollar momentum might have legs given there is nothing to necessarily alter that for now – certainly not from a global macro perspective. Of course, the obvious risk the other way is that French political risk escalates again and we see that drag the euro lower. Opinion polls will be key in that.”

“The key piece of data is perhaps the flash estimate for CPI and core CPI on 28th February. The data from the euro-zone has clearly improved although the core annual CPI rate remains stuck at 0.9%. Any upside surprise there would reinforce expectations of the ECB tapering QE later this year and would help provide support for the euro. Still, upside momentum is unlikely to be strong given the scale of uncertainty lingering in Europe.”