EUR/USD continues to hover within the range of 1.0800-1.0850, with analysts from ING providing a comprehensive analysis of the pair’s future prospects.
In recent times, the 1.0800 level has symbolized stability in the low-volatility foreign exchange environment for EUR/USD. The analysts suggest a potential departure from this range-bound scenario later in the week, driven by the combined impact of the European Central Bank (ECB) meeting and the release of US payrolls.
However, looking ahead over the next month, the ING economists express skepticism regarding a significant shift in the pair’s trading levels. They anticipate that while the resilience of US economic data may begin to wane in March, the process is likely to be gradual, with intermittent instances of robust data emerging. The analysts emphasize that for a noticeable decline in the Dollar, interest rates must witness a substantial decrease to make selling the Dollar more palatable.
The report suggests that investors might be reluctant to pivot away from the US Dollar unless the ECB vehemently opposes expectations of rate cuts, which would deviate from its recent trend. The analysts highlight that the potential for a domestic idiosyncratic boost to the Euro appears improbable without a strong stance from the ECB against anticipated rate cuts.
In conclusion, the ING economists provide a cautious outlook for the EUR/USD pair, foreseeing a possible breakout from the current range in the short term but expressing reservations about a substantial shift in the coming month, contingent on factors such as the ECB meeting and US economic data.
