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Euro capped near 200-day level as MUFG flags energy and inflation risks

MUFG says a break below the US Dollar’s 200-day moving average around 99.185 could add momentum to a stronger dollar, keeping EUR/USD capped near 1.1630.

Reported · Written up by our desk · Major Pairs

MUFG analysts at FXStreet said EUR/USD remains capped near its 200-day moving average around 1.1630, with the bank’s short term model indicating the euro is 2.5% to 3.0% overvalued.

They warned that energy driven growth risks and broader inflation pressures could weaken euro yield support, leaving the currency vulnerable to underperformance.

MUFG also linked the setup to dollar sentiment, noting that easing Fed rate hike expectations after recent US data has supported the US dollar, with the DXY still above its 200-day moving average level near 99.185.

The analysts said a break of that DXY level could add momentum to the dollar turn, and they pointed to upcoming ZEW Expectations as a potential read on whether downside risks for the euro are building over the coming months.

Latest closeEUR/USD 1.157 ▲0.4%

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