EUR/USD has been trading within a tight range of 1.0500 to 1.1000 for several months. We expect this pattern to persist in the near term. Significant economic or policy shifts are necessary to catalyze a breakout in either direction.

A more compelling case for a breakout in the EUR/USD pair would likely stem from either a notable divergence in monetary policy between the European Central Bank and the Federal Reserve or a convergence in the economic cycles of the Eurozone and the United States.