Recent resilient industrial output and confidence data support a potential rebound in EUR/USD toward 1.1800, MUFG analysts say.
EUR/USD is trading just above 1.1400, testing the lower bound of its 1.1400–1.1800 range established over the past year. The pair had faced pressure from weaker economic data and reduced expectations for European Central Bank rate hikes.
Recent indicators, including stronger industrial output and improving confidence, suggest resilience in the eurozone economy. This has led analysts to anticipate a rebound toward the upper end of the range, supported by expectations of one final ECB rate hike in September.
The reversal of the energy price shock is also expected to bolster investor sentiment toward the eurozone and the euro in the coming months.