EUR/USD advances towards 1.0200. The economists of ING report that it is possible to break above this level.
Equity spread is a guide to the pair
“Increasing market optimism about Europe is fueling a rebound in European equities, and the parallel rally in the euro keeps that correlation between currencies and equities very much alive.”
“The current swap rate spread certainly points to a stronger EUR/USD, but for the pair to reconnect with that spread under current market conditions, we will likely need a period of stabilization in European sentiment, something we are seeing now but that may be difficult to sustain in the coming weeks.”
“We are looking at another possible good day for risk assets if the US CPI moves lower as it may keep EUR/USD bid for now: a break above 1.0200 is possible at the moment, but a return to parity at the 1.0000 level remains our main scenario through the end of the year for EUR/USD.”
Source: Fx Street
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