EUR/USD was somewhat supported at its depressed levels after some rather hawkish comments from the European Central Bank (ECB). But economists at OCBC Bank do not change their negative EUR view for now.

Bounces in EUR/USD should be limited

“Comments from ECB’s de Guindos and Schnabel labelled inflation as ‘structural’ and ‘risks to the upside’. Nevertheless, this should not be confused with the ECB moving anywhere near the Fed’s current level of hawkish bias.”

“Expect the macro picture to be weighed down going forward, especially in the face of renewed lockdowns.”

“Bounces in the pair should be limited in scope, and no shift in our negative bias for the pair so long as it remains below 1.1300.”

“1.1200 should still attract.”