EUR/USD faces consolidation near term – Danske Bank

The pair is seen within a consolidative theme in the near term, suggested Arne Rasmussen, Head of FI Research at Danske Bank.

Key Quotes

“Very subdued to reaction in USD crosses to both the FOMC meeting and the WSJ story that Powell will be appointed as new Fed chair. Note that Powell is set to speak this afternoon (13.30 CET) with his words set to be closely watched for whether he intends t o continue the Yellen policy stance”.

“We maintain that EUR/USD is in a phase of consolidation but today’s possible announcement regarding a Republican tax plan could be key in determining whether we are in for a pricing of renewed optimism regarding the expansionary impact in the US of Trumponomics”.

“Evidence of further progress in getting backing for proposed tax cuts could drag EUR/USD back below 1.16 but our base case remains that the cross settles just above this level in the coming days”.