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EUR/USD: We stay neutral - MUFG

FXStreet (Córdoba) - According to the Global Market Research Team at The Bank of Tokyo-Mitsubishi UFJ, EUR/USD is likely to continue to consolidate next week and they explain why they remain neutral in the pair.

Key Quotes:

“We’ve narrowed our range back again after the gain for the dollar last week in the aftermath of the stronger than expected jobs report from the US. EUR/USD has consolidated though, as we expected, and we guess we might get more of the same next week again.”

“We do have retail sales tomorrow and CPI next week and these two reports will be most important. However, there is still just under five weeks to the next FOMC and in that context, the markets are unlikely to price more than the current 65/70% probability currently in the price. In fact there might not be much movement in expectations until the next employment report on 4th December.”

“So we stay neutral. Given we toyed with turning bullish that’s the risk (the risk to the risk bias!). Certainly if the equity market selling today was to extend for another day or two you may see EUR/USD rebound a touch, although with the Fed lingering, the upside should be limited.”

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