Euro: Choppy range outlook against US Dollar – Rabobank

Rabobank's Senior FX Strategist Jane Foley notes that EUR/USD recently fell below its prior 1‑month forecast of 1.15, prompting a reassessment of projections. RaboResearch has shifted its 1‑ to 12‑month forecast table moderately in favour of the Dollar but says its broader view is largely unchanged and expects EUR/USD to trade in choppy ranges around 1.14–1.15 in H2 and return to 1.16 over 12 months.

Rangebound profile with mild USD tilt

"Last month EUR/USD pushed below our previous 1 month forecast of 1.15, which forced us to re-evaluate our outlook."

"While we have adjusted our 1 month to 12 month forecast table this week moderately in favour of the USD, our overall outlook is not much changed from the end of last year."

"We maintain the view that EUR/USD will struggle to regain the directional uptrend that was in evidence for much of last year and that choppy ranges are more likely for the currency pair in the coming months."

"That said, in contrast to current market pricing, RaboResearch expects the Fed to hold rates steady through to the end of this year."

"We expect a choppy range centred around 1.14 to 1.15 in H2 this year and a return to 1.16 in 12 months as hawkish Fed views in the market abate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)