How low can EUR/USD go? According to Jane Foley, Senior FX Strategist at Rabobank, the world’s most popular currency pair could fall to 1.17 and below.
See – EUR/USD: Very dovish ECB to keep the pair vulnerable towards 1.17 – ING
US CPI inflation report to be directional for the greenback
“The surge in jobs creation last month combined with the uptick in wage inflation and some hawkish comments from various Fed officials could be sufficient to keep the USD on the front foot into the Fed’s Jackson Hole symposium later this month. This assumes firms readings for the US CPI and PPI inflation reports due later in the week.”
“We assumed that perceived inflation risks in the eurozone and expectations around ECB policy were likely to remain much more contained. While this assumption has held up well, the ground has shifted a fair degree since the spring. In our view, this raises the risk of a breach below 1.17.”
“In the near-term, the March 31 low close to 1.1704 is likely to offer strong support. A break below could see the year’s low close to 1.1603 come into play.”
