Piotr Matys, EM FX Strategist at Rabobank, suggests that after fairly volatile March, EUR/USD has been trading in a relatively narrow range so far this month. Key Quotes “While the price action hasn’t been particularly inspiring since the beginning of April, it is worth pointing out that a sustainable trade above the 1.1340~ pivot keeps the short-term bias skewed to the upside with the October high at 1.1495 as the key level to watch as a break higher would be a constructive signal. Although further gains in EUR/USD would be a blow to the ECB due to persistently low inflation, it could be an opportunity to establish fresh short EUR/USD positions. In our view the market is too bearish about the Fed currently expecting no hikes at all this year. In the meantime, Rabobank’s Fed watcher Philip Marey maintains his view that the Fed may raise rates on June 15. A shift in market expectations in favour of a hike (triggered by more hawkish rhetoric at the April 26-27 meeting perhaps) could reignite the downside pressure on EUR/USD.” For more information, read our latest forex news.