Euro: Test of 1.140 seen before recovery against US Dollar – ING
ING’s Francesco Pesole sees a decent risk that EUR/USD will need to test 1.140 as lingering post-Fed Dollar momentum plays out before any renewed upward pattern. He argues that positive US-Iran headlines and improved Eurozone terms of trade should limit downside, while upcoming confidence data and Purchasing Managers' Index (PMI) are not expected to be major drivers for EUR/USD.
Euro faces 1.140 test risk
"In line with our USD view above, we see a decent risk that EUR/USD will have to test 1.140 on the back of a long tail of post-Fed USD momentum before re-entering any upward pattern."
"At the same time, positive headlines from the US-Iran negotiations suggest the depth of the next leg lower should be more limited; the commodity terms of trade for the eurozone have recovered more than half of the initial war-related drop."
"On the data side, we’ll see eurozone confidence data and PMIs today and tomorrow. Still, the surveys may not yet reflect the interim peace deal and could still signal a less optimistic mood."
"We don’t expect those to be a key driver of EUR/USD, which remains very heavily dominated by the USD leg."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
