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UR/USD: THE DOWNSIDE LOOKS OPEN TO THE 1.0790/1.0800 AREA – ING

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EUR/USD has pushed below 1.0850. Economists at ING analyze Euro’s outlook.

EUR/CHF can still trade higher

The downside for EUR/USD looks open to the 1.0790/1.0800 area now and 1.0875/1.0900 looks like stronger resistance. And risks next week warn that EUR/USD could be a 1.0715/25 story. 

We are also surprised that EUR/CHF did not hand back more of its recent gains given that our recent call for EUR/CHF to trade to 0.9500/0.9600 is premised on higher Euro market interest rates. If we are correct, however, in that the ECB does not cut until June and by only 75 bps in total this year versus the 140 bps currently priced – then EUR/CHF can still trade higher.

Elsewhere, EUR/GBP is closing in on major support at 0.8500 – but a break below it looks highly unlikely ahead of next Thursday’s Bank of England meeting

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