EUR/USD forecast: attention to EMU’s CPI – Commerzbank and Danske Bank

FXStreet (Edinburgh) - EUR/USD has regained the 1.1200 handle and beyond at the beginning of the week, with market participants now focusing on EMU’s inflation figures due later.

According to Axel Rudolph, Senior Technical Analyst at Commerzbank, the pair’s “reversal last week has taken it to the 1.1216 July high around which it currently stabilises, having been held up by the support line at 1.1160. This may hold the initial test but you should be aware that we look for losses to the base of the channel at 1.0883. Near term rallies should now struggle at the 200 day moving average at 1.1303 today and at 1.1460/70 ahead of 1.1560 in the next few days”.

In addition, Senior Analyst at Danske Bank Christin Tuxen suggested the pair “
should now start to take its cue from relative rates moving in favour of the dollar ahead of a first Fed hike. This follows as we stress that while the upcoming Fed hiking cycle will be shallow in a historical context, the market is not prepared for an autumn rate rise currently. We now see the cross at 1.08 in 1M. That said, we still think EUR/USD will see a bottom in early autumn”.