The EURUSD started the week on an upbeat tone. The pair is trading at 1.1335, which is higher than the June 22 low of 1.1170. In a note, analysts at Danske Bank said that they expect the pair to climb to 1.1500 in the next three months. If this happens, it will be a 1.45% upside from the current level.
Euro set for a busy week
The euro and the EURUSD pair is set for a very busy week. On Thursday, the European Central Bank (ECB) will deliver its interest rate decision. Analysts expect that the bank will leave interest rates unchanged and continue with its quantitative easing program. We believe that the bank will start talking about tapering or expanding the asset purchases in the September or October meetings.
Meanwhile, European leaders will meet in Brussels on Friday to deliberate on the recovery fund. The fund, worth about 750 billion euros has led to significant divide among northern and southern states. A team of four countries, known as frugal four, have rejected the size of the package and its nature. They prefer giving out low-interest loans to member states instead of grants that the European Commission has suggested.
Further, we will receive other key numbers like inflation and industrial production data from the country.
Danske Bank optimistic about EURUSD
In a report by Danske Bank, analysts believe that the EURUSD will continue rallying. They expect that it will reach 1.1500 in the next three months, which is more than 1% upside from the current level. The report said:
“It will be the breath and speed of the global recovery that sets the tone in EURUSD, and mostly through the USD leg. We remain constructive and expect the broad USD to decline over the coming months. In turn, our 3M forecast is 1.15.”
EURUSD technical analysis
The EURUSD pair rose slightly today and is trading at 1.1335. On the daily chart, it is trading above the 50-day and 100-day exponential moving averages. It is also slightly below the June’s high of 1.1425.
It is also slightly above the 78.2% Fibonacci retracement level. Therefore, the pair is likely to continue rallying as bulls attempt to move above the resistance at 1.1425.
On the flip side, a move below 1.1258 will invalidate this prediction. This price is along the lowest level on Thursday last week.
EURUSD technical forecast