Danske Research discusses EUR/USD outlook ahead of the next Fed meeting on June 15-16, and sees the pair stays in a 1.20-1.24 range.
"With PMIs holding up (surprisingly) well in the US and Europe, inflation pressures are likely to stay with us. In turn, we continue to expect EUR/USD north of 1.20 in the very short term," Danske notes.
"Looking at the coming weeks, data will likely centre on inflation, jobs and central banks, and all of these will probably do little to change the big picture macro narrative. In turn, we see some opportunity to sell vol in EUR/USD on a three-week horizon (thus excluding post-FOMC drift and the next flash PMIs) based on the view that markets and the macroeconomic narrative will remain broadly unchanged. We would thus sell vol via a EUR/USD straddle," Danske adds.