EUR/USD: What will it take to get out of the recent 1.12-1.16 range? – Danske Bank

Sandeep Kanihama FXStreet Contributor

In opinion of analysts at Danske Bank, Fed’s soft signals from both the need for the balance-sheet run-off to be revisited and questioning of the need for more hikes have kept USD on the defensive.

Key Quotes

“What will it take to bring EUR/USD out of the recent 1.12-1.16 range that has prevailed since early autumn? While difficult to envisage USD significantly stronger given the end of the US hiking cycle being near and stretched USD valuation, we are unlikely to see a sustained break higher without a trade deal and or euro-zone cyclical stabilisation.”

“We expect the cycle to favour USD for now though. Further, news in today’s minutes on whether ECB is seeing a monetary policy need for liquidity injections could be a signal that the first hike may be further postponed and thus matter for EUR. We remain doubtful regarding a new TLTRO and hence do not think EUR downside from this factor is imminent.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD extends losses toward 1.1600 ahead of EU inflation data

EUR/USD extends the decline toward 1.1600 in the European session on Tuesday. The pair remains under pressure as surging energy prices amid the US-Iran war have increased the risks of higher inflation for the Old Continent. The focus is now on the Eurozone preliminary inflation reading for February.

GBP/USD drops back toward three-month lows below 1.3350

GBP/USD is back in the red, accelerating its downside toward the three-month lows of 1.3315 in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar preserves the previous upside.

Gold weakens below $5,300 as sustained USD buying counter Middle East tensions

Gold attracts some intraday selling and falls around $100 from the daily top, around the $5,380 area. The US Dollar climbs to a fresh high since January 20 and turns out to be a key factor exerting downward pressure on the commodity. However, concerns about a broader regional conflict in the Middle East continue to weigh on investors' sentiment and underpin demand for the traditional safe-haven bullion.

Stellar risks deeper losses as derivatives metrics turn negative

Stellar is trading red below $0.16 at the time of writing on Tuesday, after a slight recovery the previous day. Weakening derivatives data caps the recovery, while an unfavorable technical outlook projects a deeper correction for the XLM token in the upcoming days.

The market is not panicking it is repricing the probability distribution of Oil and time

At the end of the day, markets do not trade morality or geopolitics. They trade transmission channels. And the only channel that truly matters in this maelstrom runs through the price of energy and the time value of money.

Hyperliquid Price Forecast: HYPE rises on commodities demand amid US-Iran war

Hyperliquid (HYPE) steadies above $33 at press time on Tuesday, marking its fourth consecutive day of recovery in a broadly volatile market due to the ongoing US-Israel strikes on Iran.