ING economists discuss the EUR/USD outlook.
1.05/1.07 to prove the basis for a move towards 1.15 in the third quarter
“Yesterday there was market news of some uptick in EUR/USD interest coming through the FX options market. We can see why. 1.0700 is a decent support area for EUR/USD and we see an outside risk of a break to 1.0500. However, eurozone trading conditions are much better than last summer, which is why our medium-term models identify EUR/USD as very undervalued.”
“Our view is that 1.05/1.07 proves the case for a move towards 1.15 in the third quarter once clearer signs of US disinflation and slowing activity become much clearer.”
“Expect EUR/USD to remain soft near 1.0700/0720 and perhaps make a decisive turn after the release of US inflation data.”
See – US Core PCE Preview: Forecasts by four major banks, inflation to remain elevated in April
