EURUSD in a range heading into Ifo
EURUSD has been grinding higher towards the top end of the weekly range with some help from firmer data. Also ECB President Mario Draghi did not discuss policy at his speech in London on Thursday evening. The economic calendar remains busy into the end of the week. The ECB remains in data watch mode for now, with next week’s May flash HICP print probably the most important data point (released on 31 May). For today, we are looking for a broadly unchanged reading from Germany’s May Ifo business confidence report. This does not offer a clear direction for EURUSD, and in the lack of an obvious catalyst we suspect that the 1.2800-1.3000 range will persist for the time being. Meanwhile, the risk-aversion driven dip in EURCHF has now been partly reversed. The cross has tended to track USDCHF closely and as long as the overall USD bullish momentum remains intact, further upside is likely. We maintain a long trade recommendation targeting 1.2800.
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BNP Paribas