EUR: Short-term bullish space in the crosses – ING

EUR/USD remains cheap and oversold despite yesterday’s bounce. We estimate that the pair is still trading around 1.5% below its near-term fair value, indicating that some tariff-related risk still remains in the price, notes ING FX analyst Francesco Pesole.

Any bounce may fall short of 1,050 in EUR/USD

“The euro could perform well on the crossroads if more days go by without Europe being explicitly mentioned in Trump’s tariff comments. That support may, however, prove to be quite short-lived as things can – as we learned yesterday with Canada and Mexico – change abruptly in terms of protectionism, and the euro remains generally unattractive on various macroeconomic fundamentals. This means that any rebound may fall short of 1,050 in EUR/USD.”

“On the data front, today’s ZEW surveys in Germany will tell us if there is any glimmer of hope in the otherwise bleak activity picture. Readings are expected to remain virtually unchanged from December, which would confirm the state recessive mood.”

Source: Fx Street

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