EUR/USD remains under increasing pressure – Danske Bank

Analyst at Danske Bank Mikael Milhoj assessed the current price action of the pair and potential perspectives ahead of the ECB meeting.

Key Quotes

“EUR/USD is trading with a heavy tone heading into the ECB meeting. We expect ECB president Draghi to keep all doors open today and down play fears of QE tapering”.

“This could be interpreted as slightly dovish and drive modest near-term EUR/USD weakness where a clean break of 1.0950 would open the door for further losses”.

“Meanwhile the Fed’s Beige Book released last night showed overall that the US economy maintained a steady growth pace between late August and early October”.

“Markets price in around a 60% probability of a December rate hike from the Fed and while we expect it stay put in 2016 in our main scenario, it is a close call”.

“Hence, market rate hike expectations are likely to remain intact in coming months and thus we still see relative rates supporting EUR/USD downside in the near term”.