Euro: Choppy range outlook against US Dollar – Rabobank

FXStreet Insights Team FXStreet

Rabobank's Senior FX Strategist Jane Foley notes that EUR/USD recently fell below its prior 1‑month forecast of 1.15, prompting a reassessment of projections. RaboResearch has shifted its 1‑ to 12‑month forecast table moderately in favour of the Dollar but says its broader view is largely unchanged and expects EUR/USD to trade in choppy ranges around 1.14–1.15 in H2 and return to 1.16 over 12 months.

Rangebound profile with mild USD tilt

"Last month EUR/USD pushed below our previous 1 month forecast of 1.15, which forced us to re-evaluate our outlook."

"While we have adjusted our 1 month to 12 month forecast table this week moderately in favour of the USD, our overall outlook is not much changed from the end of last year."

"We maintain the view that EUR/USD will struggle to regain the directional uptrend that was in evidence for much of last year and that choppy ranges are more likely for the currency pair in the coming months."

"That said, in contrast to current market pricing, RaboResearch expects the Fed to hold rates steady through to the end of this year."

"We expect a choppy range centred around 1.14 to 1.15 in H2 this year and a return to 1.16 in 12 months as hawkish Fed views in the market abate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD holds above 0.6950 as bullish USD caps gains

AUD/USD edges lower during the Asian session on Tuesday, stalling a two-day recovery move from a two-month low, touched last week. An extended rout in the fixed income market keeps US bond yields elevated near multi-year highs. This, along with geopolitical uncertainties, helps the US Dollar retain its bullish tone despite receding October Fed hike bets. However, expectations for another RBA rate hike this month could act as a tailwind for the Aussie.

USD/JPY remains confined in a range; 158.00 holds the key

USD/JPY extends its consolidative move during the Asian session on Tuesday, trading below 158.00 amid diverging forces. Hawkish BoJ expectations support the Japanese Yen amid looming intervention risks. Meanwhile, geopolitical uncertainty and elevated US bond yields keep the US Dollar near its YTD high despite receding October Fed hike bets. This, in turn, holds back traders from placing aggressive directional bets.

$4,100: For how long can Gold defend that level?

Gold resumes the recent downtrend, approaching $4,100 early Tuesday. The US Dollar consolidates near 17-month highs amid high Treasury yields and a rebound in oil prices. From a short-term technical view, Gold’s path of least resistance appears to be down.

Zcash: NU7 upgrade sets the stage for ZEC to resume its rally

Zcash (ZEC) hovers around $1,348 at press time on Tuesday, sustaining its mild gains from Sunday. The network upgrade NU7 went live on Monday, boosting transaction speed and redirecting 60% of transaction fees into future rewards. The institutional outflow eased to roughly $3.50 million on Monday, down from $93.56 million last week, suggesting reduced pressure from redemptions.

The scarcity trade is gaining momentum – The biggest commodity moves may still be ahead

Something extraordinary is happening across global Commodity markets. Oil is above $100. Diesel has reached record prices. Copper has broken records. Global food prices are rising again. China is restricting fuel exports. Governments are releasing emergency reserves.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.