Danske Research discusses EUR/USD outlook ahead of this week's Fed and ECB policy meetings.

"EUR/USD remains range bound around the 1.10-mark. Yesterday, stronger-than-expected ISM figures contributed to higher US yields and broad USD appreciation in a thin market 1 May. ISM manufacturing for April was slightly stronger than consensus at 47.1 (consensus: 46.8, prior: 46.3). Also worth noting is that the prices paid component was significantly stronger than expectations at 53.2 (consensus: 49.0, prior: 49.2) - the highest since July 2022. The figures suggest that it is now almost certain that the Fed will hike by 25bp on Wednesday," Danske notes.

"We still see a risk for the cross to potentially head higher in the very near-term on a relatively hawkish ECB and positive sequential growth outlook, while we expect the cross to head lower in H2," Danske adds.