EUR/USD poised to extend the consolidation – Danske Bank

Chief Analyst at Danske Bank Arne Rasmussen noted the pair keeps pointing to a 1.06/1.10 range in the near term.

Key Quotes

“Despite a minor hawkish twist in the introductory statement following the ECB meeting yesterday, EUR/USD settled more or less unchanged after a brief period of volatile price actions where the cross initially moved up one step up (on 'downside risks diminishing') and then one step down again (on rate hikes off the table for now)”.

“EUR/USD still looks like a 1.06 -1.10 range near term, as the Fed will be there to keep some downside potential intact. However, there is clearly a risk that we could see at the June meeting the ECB change its forward guidance in a more hawkish direction provided the cyclical situation still looks good and provided that the inflation outlook has not deteriorated markedly (beyond base effects falling out) – and EUR/USD would be more sensitive to a signal on rates than to a possible extension of QE”.