Euro: Limited upside as US Dollar stays strong – ING
Chris Turner at ING highlights that EUR/USD is holding up despite higher energy prices and French budget risks, helped by unwinding of heavy US tech and Dollar positions. He sees Fed tightening expectations remaining firm and the Dollar strong in coming months. Turner says EUR/USD upside is constrained, though a tech-led Dollar correction could open a move toward 1.1340/50, with a one-month…
ING analyst Chris Turner suggests that the EUR/USD exchange rate is limited in its upside potential as the US Dollar maintains its strength. He attributes this to factors such as higher energy prices, the unresolved French budget crisis, and heavy positioning in US tech and the Dollar. Turner expects that expectations for further Federal Reserve tightening will remain strong, and that the Dollar is likely to stay robust in the coming months.
While Turner acknowledges that the EUR/USD rate could potentially rise if there is a tech-led Dollar correction, he does not recommend chasing the rally. The one-month forecast for EUR/USD is set at 1.13. Turner urges FX traders to closely monitor the short end of the US curve.
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