EUR/USD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but without a clear driving factor at this time.
Key drivers:
• The European Central Bank is maintaining a neutral policy stance, keeping rates stable while the Federal Reserve is expected to shift towards cuts, giving the euro a relative advantage.
• Oil prices are at 90-day highs, which tends to support the euro as a stronger energy sector positively influences European trade balances.
• Recent improvements in consumer confidence in Germany could boost the euro, should the trend continue as expected.
Range: The EUR/USD is likely to hold within its recent 3-month range, with potential fluctuations influenced by data releases.
What could change it:
• Upside risk: Stronger-than-expected economic data from the Eurozone could increase demand for the euro.
• Downside risk: Further deterioration of USD due to increased uncertainty surrounding federal policies may limit upside for the euro.
