The EUR/USD pair remains relatively stable. ING economists analyze the pair’s prospects.
Holds up surprisingly well
We would have thought that EUR/USD would be trading a little lower given what has been happening with US yields this week. While there may be a tendency to conclude that dollar bulls are a very crowded trade and this week’s EUR/USD price action is telling, we believe the defensive global environment makes it difficult to own the procyclical Euro.
The Eurozone data calendar is exceptionally sparse today and barring any uptick in US jobless claims or the Fed being surprisingly dovish, we would expect EUR/USD to press the Eurozone support. 1.0500. However, we would be wary of underestimating the risk of an indiscriminate reduction in open positions (dollar bullish) and would warn of a sharper correction to the upside if EUR/USD trades back above 1.0600/1.0610.
Source: Fx Street
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