Analysts at Credit Suisse expect the EUR/USD pair to trade in the range 1.1050 – 1.1600 during the first quarter. They have a target of 1.1150 for the end of the quarter. 

Key Quotes: 

“Our expected EURUSD range for Q1 is 1.1050 – 1.1600, and we continue to target 1.1150 for end-Q1. Levels above 1.1450 represent acceptable entry levels for fresh shorts from a risk-return perspective.”

“Despite the insistence of key ECB representatives that policy rate hikes are a long way off, euro area rates markets are pricing in a 25bp rate hike over the next 12 months and at least one more thereafter. This is more remarkable for the fact that the ECB has committed to ending balance sheet expansion before a rate hike is possible.”

“Markets appear to feel high current euro area inflation and the spillover effect of the Fed’s dynamic will force the ECB to act. This is providing EUR with some degree of support by limiting the extent of US - euro area rates divergence.”