EUR/USD Tests 1.10 Amidst Intraday Support – ING Economists Assess Pair’s Prospects

The EUR/USD currency pair briefly surpassed the 1.10 mark, prompting analysts at ING to examine the pair’s near-term outlook.

Intraday support for EUR/USD has proven robust in the 1.0965 area, providing a key foundation for its recent movements. The spotlight for the day is on German Consumer Price Index (CPI) data, which is anticipated to exhibit a slowdown to 3.5% year-on-year from the previous 3.8%. This, in turn, is expected to signal a softening of euro zone inflation on Thursday.

With EUR/USD currently residing above the 1.10 threshold and establishing stability with support at 1.0965, the potential for a sharp downward shift in the pair’s trajectory is contingent on a substantial upward revision in US Q3 GDP data. Barring such a revision, the consensus among analysts is that EUR/USD is likely to experience a noticeable decline.

The currency pair is projected to maintain a stable range between 1.0965 and 1.1065 leading up to the release of U.S. Personal Consumption Expenditures (PCE) inflation data on Thursday. This anticipated stability suggests a cautious market sentiment as traders await crucial economic indicators that could influence the future trajectory of EUR/USD.

As the week progresses, the performance of the euro against the U.S. dollar will be closely monitored, with a keen eye on economic data releases that have the potential to sway market sentiment and influence trading patterns. ING economists will be closely watching the developments in German CPI and the subsequent impact on euro zone inflation, factors that are likely to play a significant role in shaping the near-term dynamics of the EUR/USD pair.

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