Danske Bank holds a bullish stance on EUR/USD in the short run, underpinned by the upcoming Federal Reserve meeting and the non-farm payroll data due this week. While they expect the Fed's unchanged policy rate to have minimal impact on the EUR/USD pair, Chair Powell's expected cautious commentary could provide a lift.
Bullish Bias: Danske remains optimistic on the near-term trajectory of the EUR/USD pair.
Federal Reserve Meeting: An unchanged policy rate is projected, which might not substantially sway the EUR/USD. However, a cautious undertone from Chair Powell, likely due to tightening financial conditions, could potentially drive the EUR/USD higher.
Non-Farm Payrolls: Danske anticipates the non-farm payroll numbers on Friday to be around 180k, marginally below the market consensus of 190k. This also presents an upside risk to the EUR/USD pair.
Geopolitical Concerns: While current geopolitical dynamics have yet to majorly influence the markets, any escalation could pose a short-term downside risk to the EUR/USD pair.
While Danske holds a bullish perspective on the EUR/USD in the near-term, they remain watchful of potential risks. The outcomes of the FOMC meeting and non-farm payroll data will be crucial determinants in the pair's direction. At the same time, geopolitical tensions lurk in the background, with the potential to influence the EUR/USD trajectory should they escalate.