EUR/USD: Breaking below the bottom of this year’s 1.05-1.10 range will be a tough nut to crack – MUFG

The recent resilient performance of the Euro has continued at the start of this week with EUR/USD rising back above the 1.0600 level. Economists at MUFG Bank analyze the pair’s outlook.

One potential trigger for a break below the bottom of the range would be if the conflict in the Middle East broadened out

The price action highlights that breaking below the bottom of this year’s tight trading range between 1.0500 and 1.1000 will be a tough nut to crack. 

One potential trigger for EUR/USD to break below the bottom of the range and retest parity would be if the conflict in the Middle East broadened out, and triggered a sharper adjustment higher in energy prices that hurts European economies’ terms of terms. However, market participants remain comfortable to price in a more contained conflict.