The EUR/USD pair appears to have found a short-term fulcrum at 1.0300, notes Francesco Pisol, foreign exchange analyst at ING.
We expect the EUR/USD pair to stabilize around 1.0300
“This is a level that implies a risk premium of 2.5% to 3% (i.e. currency devaluation), which we believe will not materially reduce until more clarity emerges on Trump’s protectionist trade policy. However, this extended and more recent assessment Speculative net selling of EUR/USD The US dollar position at 11% of open interest (CFTC data) has us leaning towards another big drop in the pair, and this, in fact, may require some positive headlines for the US dollar from Trump Monday.
“There has been no shift to a less dovish tone by the ECB compared to the already dovish December meeting (minutes released yesterday), even after a slight rise in inflation; we can expect monetary policy to remain a net negative factor.” For the euro at least in the coming weeks, we expect EUR/USD to stabilize around 1.0300 today.”
