EUR/USD: Likely To Remain In 1.0625-1.10 Range Coming Weeks

05/18/2020

NAB Research discusses EUR/USD outlook and maintains a neutral bias over the coming weeks.

"The shockwaves from a ruling by Germany's Federal constitutional court (GCC) continue to reverberate across the European Union and financial markets...Specifically, the GCC, having requested a preliminary judgement from the ECJ on the charge - brought by some 1500 euro-sceptic German businesses and academics back in 2015 - that ECB PSPP Quantitative Easing was 'a violation of the prohibition of monetary financing', found the ECJ review did not satisfy the principle of 'proportionality'," NAB notes.

"NAB's view is the assessment will be delivered and accepted...We accept however, the debate here and on the GCC furore will be protracted and there are many observers who hold the opposite, more pessimistic view. That leaves the EUR unable to rise until a resolution is found and a likely 1.0625-1.10 range for now," NAB adds.