Currency analysts at ING have assessed the current state of the Euro, observing a decline in EUR/USD below the critical level of 1.0850. The experts present their outlook on the Euro’s performance, highlighting potential downside risks.
EUR/USD, having dipped below 1.0850, is now seen as having the downside open to the 1.0790/1.0800 range, with stronger resistance anticipated at 1.0875/1.0900. The analysis suggests that the coming week may bring additional risks, potentially leading to a scenario where EUR/USD could trend towards 1.0715/25.
In a surprising move, EUR/CHF has not retraced significantly despite recent gains. The analysts express their astonishment at this, particularly given their earlier projection for EUR/CHF to reach 0.9500/0.9600. This forecast was contingent on the expectation of higher Euro market interest rates. Despite the absence of a more significant retracement, the analysts posit that if their projection holds true, with the European Central Bank delaying rate cuts until June and implementing a more modest cut of 75 basis points instead of the currently priced 140 basis points, EUR/CHF may still exhibit an upward trajectory.
Shifting focus to EUR/GBP, the currency pair is noted to be nearing major support at 0.8500. However, the analysts express skepticism about a break below this support level, deeming it highly unlikely, particularly in anticipation of the upcoming Bank of England meeting scheduled for next Thursday. The impending event adds an element of uncertainty to the market dynamics surrounding EUR/GBP.