Antje Praefcke, FX Analyst at Commerzbank, discusses EUR/USD outlook.

Not the time for new positions

There is uncertainty as to what the Fed will do and how it will communicate its monetary policy decision. And as we are unlikely to know more by next week, while the inflation data might cause further confusion, I assume that the Dollar will not receive any new stimulus for now.

Just like with the Fed the ECB Council members too are prevented from commenting the week before the next meeting. That means the Euro is also likely to lack any momentum for significant moves.

I assume that over the coming days, EUR/USD will linger around 1.07 due to a lack of clear momentum, with the market waiting for the central bank decisions to give direction next week. It does not really make sense to enter major new positions before that.