MUFG Research discusses EUR/USD outlook and adopts a neutral bias on multi-days basis, expecting the pair to stay in 1.12-1.1.5 range in the near-term.
"Evidence of the still strong data flow from the US has helped to dampen US dollar downside alongside clearer evidence of weaker growth overseas. In particular the data flow from the euro-zone keeps surprising to the downside at the start of this year which is heightening fears over a more protracted and sharper slowdown. The release of the latest euro-zone GDP report for Q4 will shed further light. The looming risk of a negative shock from a “No Deal” Brexit remains on the table," MUFG notes.
"In many respects, the euro has been holding up relatively well considering the constant stream of bad news since late last year. A negative shock maybe required to lower the euro deeper into undervalued territory," MUFG adds.