EUR/USD Outlook: The outlook for EUR/USD is slightly positive, likely to move sideways as it is just above its recent average and trading near mid-range levels.
Key drivers:
• Rate gap: The European Central Bank is expected to maintain a neutral stance, while the Federal Reserve may consider cutting rates, which could pressure the USD.
• Risk/commodities: Oil prices are currently higher than average, which strengthens commodity-linked currencies but could lead to volatility for the USD.
• One macro factor: Upcoming Non-Farm Payroll data is anticipated to influence perceptions of Fed easing, adding uncertainty to the USD's future direction.
Range: EUR/USD is likely to hold within its recent range, as both currencies are experiencing mixed signals.
What could change it:
• Upside risk: A strong rebound in Eurozone economic indicators, particularly from Germany, could bolster the EUR further.
• Downside risk: A significant escalation in US-China trade tensions could promote a flight to the USD, weakening the EUR.
