MUFG Research adopts a neutral bias on EUR/USD ahead of the US November elections.
"The recent loss of upward momentum for the EUR has coincided with building concerns over rising COVID cases in Europe. As can be seen the chart below, the number of new cases in major European counties is now higher than in the US. A dynamic that could already be helping to ease bearish sentiment towards the USD in the near-term, especially if policymakers in Europe respond by imposing tighter restrictions on activity," MUFG notes.
"In these circumstances, we continue to expect the EUR to remain in a consolidation phase at higher levels ahead of the US election. The EUR’s recent loss of upward momentum brings some relief for the ECB although we still expect that policymakers will deliver further easing at next month’s meeting," MUFG adds.