Danske Bank says EUR/USD's break above 1.1500 has challenged its bullish Dollar view, with further declines in US real yields likely to place its short-Euro position under increasing pressure. The Euro to Dollar exchange rate ended July near 1.1530 after the post-Federal Reserve Dollar selloff carried the pair decisively above.
It was a big week for the FX market, but most of that drive came from the USD/JPY pair. While the prior week ECB meeting saw Christine Lagarde take a dovish tilt, EUR/USD stuttered after a downside break of a bear flag formation.
ING expects EUR/USD to remain supported around 1.1500 following the sharp Dollar selloff, although a sustained move above 1.1600 would require a further dovish repricing of US interest rates. The Euro to US Dollar exchange rate (EUR/USD) gained just over 1% in July, recovering from a monthly low near 1.1354 and reaching a high around.
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Euro slips back below 1.1500 as US Dollar recovers
The U.S. dollar weakens after the Federal Reserve held interest rates steady, while EUR/USD and GBP/USD strengthen as markets assess global policy divergence.
EUR/USD Price Forecast: Weakens to near 1.1500 as 100-day SMA caps upside
EUR/USD's break of 1.1499 support turned resistance argue that fall from 1.2081 might have completed as a three wave correction at 1.1323. Intraday bias is back on the upside for 1.1621 cluster resistance (38.2% retracement of 1.2081 to 1.1323 at 1.1613).
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