EUR/USD: Summer break and sideways trading – Commerzbank

EUR/USD treads water around 1.02. Economists at Commerzbank expect the world’s most popular currency pair to remain confined within its current 1.00-1.04 range.

Summer lull

“I can’t think of any good reasons why EUR/USD should break out of its current 1.00-1.04 range at present. The US labour market report did not manage to do that. The US CPI data due for publication tomorrow is unlikely to succeed either.”

“There is uncertainty as to the extent to which the ECB will continue tightening its key rate. At present the market expects rates to peak at 1.25%, there is no convincing reason to change this expectation at present.”

“It seems that EUR/USD is starting its summer break, even though it no doubt makes sense to keep an eye on the geopolitical and energy situation. However, while there is no surprise news on that front (the central banks are unlikely to provide any right now) the market can no doubt get used to EUR/USD trading sideways.”