EUR/USD is flat at 1.2192 today
Credit Suisse discusses EUR/USD outlook ahead of the ECB June 10 meeting.
“The risk the ECB faces is that, if it takes its eye off the
ball as the Fed retains its dovish bias, EURUSD could take out 2021
highs around 1.2350 and push higher into an entirely new, and
possibly very uncomfortable, trading range. It’s true that rising euro
area inflation expectations and growth prospects likely make the ECB
comfortable with EURUSD levels at the top end of the 1.0340 – 1.2555
range that has prevailed since the start of 2015. But we are less
confident it would be excited about seeing EURUSD move back towards the
average level near 1.3500,” CS notes,
“It is for this reason that, while we have assumed that
EURUSD will likely test the top of our expected 1.1950-1.2350 range for
the rest of Q2 ahead of the 10 Jun ECB meeting, we have held the view
that the ECB will contrive to sound just dovish enough to prevent a
material and sustained upside breach,” CS adds.
For bank trade ideas, check out eFX Plus.