U.S. dollar movement in the months ahead will be somewhat data and Fed dependent. From January through late March, the euro/dollar pair (EUR/USD) traded between roughly $1.2850 and $1.3400. For now, analysts point to strong resistance around $1.34. However, further weakening of the U.S. economic picture and Fed easing could weigh on the greenback. Fabbri says the euro/dollar could potentially move toward $1.42/1.45 later in the year.
Conversely, Todd Elmer, currency strategist at Citigroup has a six-month target for euro/dollar at $1.26 based on his more upbeat forecasts for U.S. growth. Elmer says concerns regarding potential spillover from housing into the broader economy have been overplayed.
How the economic scenario unfolds in the U.S. over the next several months will be a critical factor for U.S. dollar direction and monetary policy
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