MUFG Research discusses EUR/USD outlook in light of yesterday's dovish FOMC outcome.
"The euro is again attempting to break out to the upside from its recent narrow trading range between the 1.1200 and 1.1500-levels which has been in place since October. The next key resistance level is provided by the 200-day moving average at 1.1563. EUR/USD has not been able to close above it’s 200-day moving average since April of last year. The latest developments are supportive of our view that the euro is currently in the process of bottoming out against the US dollar," MUFG notes.
"The further dovish shift in Fed policy has increased upside risks to our outlook for EUR/USD which we expect to rise back towards the 1.2000-level in the year ahead. The recent price action has backed up our view that the pair should prove more sensitive to changes in Fed rather than ECB policy," MUFG adds.