Near-term, EUR/USD continues to test 1.160, though we see a sustained move higher as premature without softer US data, with range-bound trading likely to persist, ING's FX analyst Francesco Pesole notes.

More range-bound trading in the near-term

"We ran the following survey for our audience: where do you see EUR/USD ending 2026? 40% of the 105 respondents chose 1.20-1.25, which is in line with our call (1.22), 36% selected a stable 1.15-1.20 range and 18% expected depreciation to 1.10-1.15."

"Only 2% and 4%, respectively, selected appreciation beyond 1.25 or depreciation below 1.10. These figures are broadly in line with consensus, which sees EUR/USD at 1.21 at the end of 2026, whilst also confirming that general expectations are for capped volatility in EUR/USD next year."

"Back to current matters, EUR/USD has been attempting a break above 1.160, and while we are bullish on the pair into year-end, we admit a decisive move higher may be a bit premature. Undervaluation has been trimmed to 0.5% in our short-term fair value model estimates, and the dollar is expensive to sell from a carry perspective. In our view, some soft US data is needed before 1.170 becomes a realistic short-term target for EUR/USD. For now, we expect more range-bound trading."