EUR/USD with a bearish bias - MUFG

Analysts from The Bank of Tokyo-Mitsubishi UFJ, see the EUR/USD  with a bearish bias for the next week with price protected to move between 1.1050 and 1.1400.

Key Quotes:

“The euro is continuing to grind lower against the US dollar attempting to break below the bottom of 1.1200 to 1.1600 trading range which has remained in place over the last couple of months.”

“EUR/USD continues to be driven primarily by the performance of the US dollar which is strengthening in response to the signal from the Fed that it plans to resume gradual rate hikes soon. The market still doubts that the Fed will raise rates at their next meeting in June. The Fed has signalled that the outlook for monetary policy remains data dependent. The main US economic data releases in the week ahead will be the upcoming labour market updates for May, personal spending and deflator reports for April.”

“The main focus in the week ahead for the euro will be the upcoming ECB policy meeting. We do not expect the meeting to prove market moving for the euro as the ECB is comfortable to maintain its current pace of policy easing. The ECB will hold another TLTRO in June providing cheaper financing. Higher take up could weigh modestly on the euro. The reduced risk of Brexit is providing limited to no support for the euro.”