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May 10 - 12:55 PM

ANZ: Outlook and Targets for EUR/USD in the Coming Week

By eFXdata  —  May 10 - 10:45 AM

Synopsis:

ANZ provides an analysis of the EUR/USD pair, predicting a subdued performance in the coming week despite positive sentiment indicators in Europe. The report contrasts ongoing economic challenges in Germany with improving sentiment indicators across Europe, forecasting potential impacts on the EUR/USD exchange rate.

Key Points:

  • Economic Data Discrepancy: Despite positive sentiment in Europe, as indicated by upcoming ZEW survey results, recent German factory orders and industrial production data have underscored persistent manufacturing struggles.
  • Expected Data Releases: The focus in the upcoming week will be on Q1 GDP and employment data from Europe, which are anticipated to show signs of recovery, reflecting the positive movement in composite PMIs.
  • Impact of US Data: Anticipated strength in the USD, especially around the US CPI release, is expected to pressure EUR/USD further.

Conclusion:

While sentiment in Europe shows signs of improvement, ANZ remains cautious about the prospects for the EUR due to the mixed economic data and expected USD strength. They forecast that EUR/USD will struggle to breach 1.08 and might even dip below 1.07 temporarily next week, suggesting a bearish outlook for the pair in the short term.

Source:
ANZ Research/Market Commentary

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