MUFG Research discusses EUR/USD tactical outlook and adopts a neutral bias, expecting the pair to trade sideways in a 1.1000-1.1250 range in the near-term.
"The euro’s upward momentum has now stalled in the nearterm undermined in part by the release of the latest PMI surveys for October which continued to signal that the euro-zone economy continues to slow heading into year end and is moving closer to stagnating. The release of the euro-zone GDP for Q3 will be scrutinized closely in the week ahead," MUFG notes.
"It remains to be seen whether recent optimism over progress towards a US-China trade and Brexit deal will eventually encourage a pick-up in growth. The EU is expected to grant the UK another Brexit extension in the week ahead, most likely until the end of January. However, it has become less clear how the UK government then plans to proceed to pass the Brexit deal through parliament. If the government pursues a snap election and is successful, then the additional political uncertainty could act as modest dampener on the pound and euro, although No Deal risks should remain diminished," MUFG adds.
"The euro’s upward momentum has now stalled in the nearterm undermined in part by the release of the latest PMI surveys for October which continued to signal that the euro-zone economy continues to slow heading into year end and is moving closer to stagnating. The release of the euro-zone GDP for Q3 will be scrutinized closely in the week ahead," MUFG notes.
"It remains to be seen whether recent optimism over progress towards a US-China trade and Brexit deal will eventually encourage a pick-up in growth. The EU is expected to grant the UK another Brexit extension in the week ahead, most likely until the end of January. However, it has become less clear how the UK government then plans to proceed to pass the Brexit deal through parliament. If the government pursues a snap election and is successful, then the additional political uncertainty could act as modest dampener on the pound and euro, although No Deal risks should remain diminished," MUFG adds.
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