Following the release of robust US jobs data on Friday, the EUR/USD pair dipped below the 1.0800 mark, prompting analysts at ING to assess the outlook for the currency pair.
The prevailing sentiment in the market suggests a 55% probability of an ECB rate cut in April. Analysts highlight the potential for the pair to trend towards the 1.0700 area, with much hinging on the dynamics of the US side of the equation. In the Eurozone, the economic calendar remains relatively light, leaving the stage open for external factors to influence the pair’s movement.
Despite the tempting narrative pointing towards a descent to the 1.0700 level, the report underlines the role of the US side in determining the course of the EUR/USD pair. The looming prospect of an ECB rate cut in April adds an element of uncertainty. If the market perception of a rate cut diminishes, there is a possibility of a short-term boost in EUR-positive sentiment, particularly in short-term rates.
However, the report acknowledges the ambiguity surrounding the removal of the April rate cut expectation this week. The Euro’s trajectory appears closely tied to developments on the US front, emphasizing the importance of monitoring external factors that may shape the currency pair’s near-term direction. Investors are advised to stay vigilant for potential shifts in market sentiment that could influence the EUR/USD pairing.