Euro-Dollar's Recovery Won't be Swayed by Trade War Worries, can go Higher: UniCredit

The EUR/USD exchange rate can go higher in the medium-term as the single-currency displays an immunity to ongoing US-China trade tensions and expectations for US economic outperformance to fade.

The EUR/USD exchange rate has made strong gains over recent weeks aided by a tightening in monetary policy in the region and our technical studies suggest further advances are likely.

The Euro was unmoved Thursday when the European Central Bank left all of its interest rates unchanged for September and confirmed earlier guidance relating to the shuttering of its quantitative easing programme.

The Euro-Dollar exchange rate is likely to being a gradual, yet steady, advance that could go as high as 1.30 over coming months.

Technical indicators argue trend may now be down with strong data from US and safe-haven flows supportive of USD. BUt upside risk for Euro in the week ahead from the ECB meeting; Dollar sees release of inflation data.

Euro exchange rates could receive a leg-up next Thursday when the European Central Bank meets for its September monetary policy meeting.

The Euro-to-Dollar rate is likely to fall over coming weeks as Eurozone politics return to haunt the single currency although this time weakness in the exchange rate should be viewed as a buying opportunity by traders, according to Bank of America Merrill Lynch. 

According to the latest Elliot wave analysis of the Euro-Dollar exchange rate, the next short-to-medium term target is located at 1.2050.