EUR/USD to consolidate around current levels in the near term – Danske Bank

EUR/USD was supported by risk-sentiment during yesterdays' session rising back above the 1.09 mark with US retail sales not sending any firm signals, Danske Bank's FX analyst Jens Nærvig Pedersen reports. 

USD can rebound very quickly on EU concerns

"Today, focus turns to the important vote in the German Bundestag where a 2/3 majority is needed to pass a range of fiscal measures including a reform of the constitutional enshrined debt brake. While not our base case, failing to secure the necessary 2/3 majority would trigger a broad EUR-weakening." 

"More broadly, we expect EUR/USD to consolidate around current levels in the near term, with risks still skewed to the upside. However, we increasingly believe US pessimism is overstretched. The key risk to further EUR/USD upside is that if upcoming data fails to validate market concerns about the US economy, the USD could rebound quickly."