EUR/USD Outlook:
The EUR/USD is slightly positive and likely to move sideways as it trends above its recent average and within range. ING Bank view: ING sees meaningful downside risk for EUR/USD, given recent price action that points to persistent buy-the-dip behavior.
Key drivers:
• Rate gap: The European Central Bank (ECB) is expected to maintain an accommodative stance, which could limit potential euro gains against the US dollar.
• Risk/commodities: Oil prices are trading significantly above recent averages, boosting the euro as energy costs influence economic stability in Europe.
• One macro factor: Recent upbeat US jobs data indicates a resilient labor market, supporting the dollar’s strength.
Range:
Expect EUR/USD to hold its current position within the recent range, without significant breakouts.
What could change it:
• Upside risk: A resolution in geopolitical tensions could enhance euro demand and bolster its value.
• Downside risk: A contraction in durable goods orders in the US could raise fears of economic slowdowns, thereby strengthening the dollar and negatively impacting the euro.
