MUFG Research sees EUR/USD supported in the near-term on 3 key factors.
"EUR/USD is holding up better than we expected with a number of factors providing support. Firstly, the drop in US yields on the speculation of the Fed slowing the pace of tightening has helped risk assets and weakened the dollar. Secondly, natural gas prices continue to fall sharply. The TTF contract fell 16% yesterday and is now down by just over 70% from the intra-day record high in August," MUFG notes.
"Thirdly, yield spreads (even prior to the drop Friday & yesterday) are consistent with EUR/USD in the region of 1.050-1.100 and if risk stabilises it is hard to see EUR/USD declining from here," MUFG adds.