EUR/USD slips back to the sub-1.0400 area at the end of the week. Economists at Nordea believe that the pair has limited upside potential. 

Investors are positioned for a higher EUR/USD

“We believe that EUR/USD will be range bound in the weeks to come.”

“When looking at technicalities it would seem the upside in EUR/USD is capped as the cross has risen close to the 200-Day Moving Average, which is a solid resistance level. Moreover, the 14 day Relative Strength Index is close to 70, a level suggesting the USD is oversold against the EUR.” 

“From a fundamental perspective, two-year interest rate differentials between EUR and USD argues for lower EUR/USD, while investors are positioned for a higher EUR/USD.”