EUR/USD slid towards the end of the week on the news from Turkey, but basically remains entrenched in range. What’s next for the pair? Here are two opinions:

Here is their view, courtesy of eFXnews:

EUR/USD: A Slow Grind Lower Towards 1.08 En-Route To 1.05 – Deutsche Bank

EUR/USD weakened moderately following the Brexit outcome but the lack of follow-through is consistent with our assessment that the broader political and economic implications for Europe will take a very long time to play out. In the meantime reduced Fed expectations as well as European risk aversion have tended to provide countervailing support to the euro which can benefit from risk-aversion driven repatriation flows.

Looking ahead to the rest of the year we continue to anticipate a slow grind lower in EUR/USD helped by an eventual Fed rate hike by the end of the year (which the market is under-priced for) as well as a persistently dovish ECB that encourages a continuation of exceptionally large European portfolio outflows that offset the Euro-area’s current account surplus.

Arguing against a more aggressive forecast include expectations of a -20bps cut to the ECB depo rate which we believe is excessive and downside risks to European growth via persistent European banking problems: while both may be negative for the euro from a risk premium perspective, they also have the potential to further delay Fed hikes as well as provide offsetting support via risk-aversion driven repatriation flows.

DB targets EUR/USD at 1.08 by the end of Q3 and at 1.05 by the end of the year.

Week Ahead: Rangy EUR/USD To Test The ‘Draghi Put’

By Credit Agricole We are worried that investors have got ahead of themselves wishing for helicopter money in Japan. Indeed, such a policy would likely necessitate legislative changes and political commitment that go well beyond the current Abenomics plans.

Investors may be correct in assuming that dovish is the default setting of the global central banks, and we think that next week’s ECB meeting will reiterate the view that the ‘Draghi put’ is firmly in place. That said, we also believe that easier global financial conditions post Brexit and improving US data give the Fed an opportunity to normalise rates before long. Any indication of that in the coming days may come as a rude awakening for the markets, which see no rate hikes before 2018.

EUR/USD should remain range-bound, caught between easing Brexit fears and persistent policy-divergence headwinds.

We remain bullish on USD against CAD and NOK as we expect the oil outlook to deteriorate further.