EUR/USD fell below 1.09 yesterday, Danske Bank's FX analyst Jens Nærvig Pedersen reports.
"Despite the FOMC's dovish stance, which has pressured US yields lower, and President Trump's comments advocating rate cuts, EUR/USD has struggled to gain upside traction. Instead, the pair has steadily declined, with the USD broadly strengthening across G10 yesterday, likely driven by risk-off sentiment."
"No clear catalysts have emerged, as jobless claims remain relatively stable and the Philadelphia Fed business outlook slightly exceeded expectations. The risk of further EUR/USD decline is reflected in one-week risk reversals falling to 42bp in favour of puts over calls - the most bearish sentiment since the beginning of March."
"We still expect EUR/USD to consolidate in the 1.08-1.09 range in the near term."