Economists at Crédit Agricole expect the EUR/USD pair to remain range-bound due to four reasons.

Uncertain timing of Fed dovish pivot

The Federal Reserve's shift to a more dovish stance remains uncertain, and this ambiguity could keep the USD supported in the coming months. Until there's a clear signal from the Fed, the strength of the USD may continue.

Peak Fed followed by peak ECB

If the Fed reaches its peak, it should soon be followed by the ECB doing the same. This would cap any significant widening in the EUR/USD rate spread, limiting the potential upside for the EUR/USD pair.

Potential US economic downturn in Q4 2023

A US economic downturn in the fourth quarter of 2023 could contribute to global cyclical headwinds. This situation could further complicate the currency dynamics between the EUR and USD.

Temporary Eurozone growth outperformance

Any outperformance of Eurozone growth relative to the US might be only temporary. If this occurs, the momentary strength in the EUR could soon fizzle out, keeping the EUR/USD pair within a range.