📝 EUR/USD Could Be Trading In A 1.10-1.15 Range: NAB Strategy

With the ECB on Thursday discussing a 25bp or 50bp hike (we believe it will decide on 25bps) the language from the meeting, that there is ‘more work to do’, including discussion of a likely increase in its QT program - which will need to be decided by the June meeting and could see it double non-reinvestment of maturing assets to around EUR30bn per month - will give the EUR another leg up. While still in our 1.08-1.12 range, EUR/USD has been trying recently to gain a more solid foothold above 1.10. The outcome of this week’s Fed/ECB meetings has the capacity (if the Fed does not dig its heels in) to launch EUR/USD to the top end of our 1.08-1.12, trading around and above 1.11. Give that some time to settle down and we’ll be more able to state the pair has made the jump to a 1.10-1.15 range.

- NAB FX Strategy