EUR/USD to trade firmly in April – Mizuho Bank

Analysts at Mizuho Bank expect EUR/USD to trade firmly in April as they feel that there do not appear to be any factors capable of pushing the pair above $1.25, while there also seems to be substantial buying appetite lined up at the $1.22 level.

Key Quotes

“Though the forecast continues to look bullish for the euro in the medium term, there are no signs of the euro climbing further at this moment in time.”

“Political risk is also on the wane in Germany, thus removing one of the factors weighing down the euro/dollar pair’s topside.”

“The markets are expecting the first rate hike to take place around the middle of 2019. Of course, the ECB will tread carefully until that moment, but the euro looks set to move bullishly overall on deep-rooted expectations for such a move.”

“The euro could also be bolstered by external factors. Specifically, depending on how U.S. trade policy develops, the dollar might be sold on global concerns about trade disputes. The EU has indicated it is prepared to take retaliatory measures if the U.S. imposes further tariffs. This could lead to euro appreciation, so caution will be needed. Things seems to be easing off at present, but the situation still presents a risk factor and it will require monitoring from here on.”

“For the reasons stated above, the euro/dollar pair looks set to move firmly this month. However, there are no factors capable of pushing the euro significantly higher, so the pair will probably remain firm while market participants wait for an opportunity to test its topside.”