EUR/USD Price Action:
- EUR/USD temporarily breached 1.0850 on Tuesday but closed flat.
Analysts’ View (ForExim):
- The EUR/USD pair is expected to remain largely range-bound in the near term.
- France’s higher-than-expected budget deficit had minimal impact on the Euro.
- OAT spreads (French government bond yield spread) remained stable despite the news.
- Fiscal concerns in France might resurface later in the year, but the ECB’s easing stance could support the Eurozone bond market.
Key Drivers:
- No major catalysts for a significant breakout are anticipated this week.
- US core PCE data release on Friday could potentially trigger volatility if it deviates substantially from the expected 0.3% month-on-month increase.
Forecast:
- ForExim analysts predict EUR/USD to stabilize around the 1.0850 level.